The Islamic militant group Hamas swept to victory over the long-dominant Fatah party yesterday in Palestinian parliamentary polls, a political earthquake that could bury any hope for peace talks with Israel soon.

Hamas won an overwhelming majority in the 132-seat legislature, taking 76 seats to Fatah's 43 in Wednesday's election, the official vote count showed. It gives Hamas the power to shape and possibly even lead the next cabinet.

The shock outcome does not automatically unseat President Mahmoud Abbas, a moderate Fatah leader elected last year after Yasser Arafat's death.

But he has said he might resign if unable to pursue a peace agenda.

US President George W. Bush appealed to Mr Abbas to stay in office but took aim at Hamas, vowing Washington would not deal with an armed Palestinian group advocating Israel's destruction. Hamas rebuffed demands to disarm and change its charter.

"Today we woke up and the sky was a different colour.

We have entered a new era," Palestinian chief negotiator Saeb Erekat, of Fatah, said after Hamas claimed victory.

Fatah loyalists clashed with triumphant Hamas supporters who briefly raised their green flags at the entrance to the Palestinian Parliament in Ramallah. Fatah activists trampled on one of the banners when it was lowered. Shots were fired nearby.

With peace talks stalled since 2000, and Israel and Hamas bitter enemies, Interim Prime Minister Ehud Olmert could opt for more unilateral moves to determine Israel's borders on land that the Palestinians want for a state. It has already pulled its settlers out from the Gaza Strip without negotiations.

Mr Olmert, who took over from Ariel Sharon after he suffered a stroke three weeks ago, suggested as much in a speech this week in which he repeated that peace talks could not resume unless the Palestinian Authority disarmed militants. Hamas, whose support among Palestinians is based partly on the suicide bombings it has mounted against Israel, geared its election campaign to public frustration over Fatah's failure to achieve statehood and its reputation for corruption.

The Islamic group's charity network in the impoverished Gaza Strip and in the West Bank also boosted its popularity.

"Hamas did not win because people loved Hamas, but because people were taking revenge against the past years of Fatah rule," said Adel al-Helo, 41, a Gaza shopkeeper.

In its first official comment on the poll result, Israel urged the European Union to take a firm stance against the establishment of a Palestinian "terrorist government".

Leaders of the EU, the biggest donor to the aid-dependent Palestinian Authority, said earlier that Hamas must renounce violence and recognise Israel or risk international isolation.

In Washington, Mr Bush said Hamas's victory was a sign that Palestinians were unhappy with the status quo and showed democracy at work, which was positive for the Middle East.

But he stuck firmly to the US view of Hamas as a terrorist group. It has carried out nearly 60 suicide bombings in Israel since the latest uprising began over five years ago.

"I don't see how you can be a partner in peace if you advocate the destruction of a country as part of your platform," Mr Bush told a news conference. "You can't be a partner in peace if... your party has got an armed wing."

The United States is the main sponsor of the long-stalled "road map", a peace plan that charts mutual steps towards the creation of a Palestinian state alongside a secure Israel. Fatah advocates a two-state solution to the conflict.

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