Many Palestinians say they are indifferent to the outcome of the vote, though the Palestinian leadership has made little secret of its preference for the Labour Party leader, Ehud Barak.

Palestinian leaders have refrained from taking sides in public.

They also decided not to declare an independent Palestinian state on 4 May as they had planned, knowing that this would play into the hands of Binyamin Netanyahu and the hardliners.

'Elect peace'

But the Palestinian leadership has left little doubt about who it would like to see emerging victorious.

Barak: Choice of Palestinian leadership

Palestinian leader Yasser Arafat has called on Israeli voters to "elect peace".

The remark has been seen as a thinly-veiled endorsement of Mr Barak, who is expected to defeat Mr Netanyahu.

But many ordinary Palestinians have said they do not see much difference between the two sides and they do not much care who wins.

Many of the worst things that happened to the Palestinians happened under Israeli Labour administrations.

They know that Mr Barak himself is no soft touch. He was one of the few cabinet ministers who did not endorse the Oslo peace agreement with the Palestinians in 1995, on the grounds that it might endanger Israeli security.

'Minimal differences'

Palestinian leaders opposed to the Oslo accords have cautioned against high expectations.

The head of the PLO's political department, Farouk Kaddoumi, said there were no basic differences on the peace process between the Labour Party and Likud.

"Whether Likud or Labour wins, it will not change things much because we have experience with both parties and the differences between their positions are minimal," he said.

"It's true that the Labour Party shows more flexibility but it will do nothing to unblock the peace process unless international pressure is applied, especially from the United States and Europe."

Arab scepticism

Netanyahu: Accused of intransigence

Similar caution has been expressed in Egypt, which has been at peace with Israel since 1979. Egypt's official newspapers warned against expecting too much from Labour.

"Arabs are also not over-optimistic if the Labour party under Barak reaches power as his election platform doesn't encourage optimism," said an editorial in the government newspaper Al-Akhbar.

"He sees eye-to-eye with Likud on the issue of Jerusalem being the eternal capital of Israel, a stance that torpedoes the basis of all the principles of peace."

This view was echoed by a prominent Egyptian columnist for the government newspaper Al-Ahram.

"It's better for the Arabs not to be over-optimistic about Ehud Barak who has not demonstrated until now reliable political skills which we saw with Yitzhak Rabin," wrote Salama Ahmed Salama.

Netanyahu 'intransigent'

Syria has been equally sceptical. It said there would be no progress on the peace process unless Israel goes back on what it described as Mr Netanyahu's "intransigent stance".

The government newspaper Tishrin also expressed doubts about Mr Barak's pledge to withdraw from Lebanon.

It said that although the Labour challenger had committed himself to withdrawing from Lebanon within a year and relaunching talks with Syria and Lebanon, he had not specified the the basis for such negotiations.

Some Palestinians say they would prefer to see Mr Netanyahu return to power because of his divisive impact on Israeli politics and society.

Middle East Correspondent Jim Muir says there is no doubt that a Labour victory would increase the chances of getting the stalled peace process moving again.