Hamas’ victory in the Palestinian parliamentary elections held last Wednesday has visibly shaken up the political landscape of the Middle East, strengthening the position of Islamic militants who call for Israel’s destruction and raising questions as to what to expect in the long-lasting dispute with Israel.

The vote was an exemplary exercise in democracy, with little trouble and an extraordinarily high turnout. In the end, after initial projections had given Fatah the lead, it was Hamas that won handsomely.

Hamas won 76 seats in the 132-member parliament, compared to Fatah’s 43. The rest of the parliamentary seats were taken up by smaller parties, with limited influence.

The Islamists gained massive support by taking advantage on widespread discontent with Fatah’s apparent ineffectiveness, and now have a right to form the next Palestinian government. Following their victory, the whole scenario in the Middle East has changed, and world leaders have expressed shock at the outcome of the election.

According to news reports, Palestinian leader Mahmoud Abbas, a moderate, will remain as President. But he has also said that he would resign if he would not be in a position to pursue his agenda for peace.

Hamas is now sure to take a much bigger role in Palestinian decision-making and the initial statements from Hamas leaders have not been promising for the peace process. Mushir al-Masri, a senior Hamas official, said recognising Israel and negotiating with it are “not on our agenda”.

Fatah have rejected to join forces with Hamas in government, a move that is being described as the first step in leaving Hamas on their own and effectively halting the Middle East peace process.

The United States and European leaders declared that Hamas could not form a legitimate government unless it drops its demand to destroy Israel and renounces violence.

Israel has gone a step further. Acting Prime Minister Ehud Olmert issued a statement saying that “The state of Israel will not negotiate with a Palestinian administration if even part of it is an armed terrorist organisation calling for the destruction of the state of Israel.”

It was immediately clear that the result of the election led to a general feeling in Israel that peace prospects had suffered a significant blow.

Observers have said that the Hamas victory will weaken those who think Israel has a partner to negotiate with and it will strengthen those who don’t think so, which means it will strengthen the inclination for Israel to either exercise unilateralism or do nothing.

Although Israel has suggested that more unilateral withdrawals are possible, Palestinians believe that unilateralism is a threat to their statehood aspirations.

A day before the election, acting Israeli Prime Minister Ehud Olmert suggested that more unilateral moves – similar to last summer’s Israeli withdrawal from the Gaza Strip – could be taken if Israel feels there is no Palestinian leadership to talk to.

Olmert is the front-runner for the 28 March elections in Israel. But Hamas’ victory could hurt the electoral prospects of Olmert’s centrist Kadima party, formed by Ariel Sharon last November.

Prospects for peace could actually improve if the election result changes Hamas’ vision. Being in government and being in opposition are two totally different matters. But this does not mean that Israel will be taking chances.

Both Israel and the United States have declared Hamas a terrorist group and refuse to deal with it. But a different policy now appears possible.

While this week’s victory for Hamas has sent shockwaves and seriously raised doubts that peace in the Middle East is still possible, if Hamas renounce violence, the prospects might change.

We have to wait and see.