One of the candidates to succeed Mr Yasser Arafat as leader of the Palestinian Authority Marwan Barghouthi is considering dropping out of the election, according to an Arab member of the Israeli Knesset.
Barghouti is serving five life sentences on charges of directing attacks against Israelis and is an iconic figure in the Palestinian uprising against occupation. He denies the charges.
His only opponent is caretaker leader Mr Mahmoud Abbas, a moderate backed by Israel and Washington.
Today's news of Barghouti's possible withdrawal emerged on the day that four Palestinian militants and an Israeli soldier were killed in the heaviest fighting in Gaza since the death of Mr Arafat.
Gunmen from the rebel groups Islamic Jihad and Hamas were killed when they ambushed Israeli troops.
The violence could threaten the relative stability in the Palestinian Territories in the run up to the elections due to take place on January 9th.
Hamas today warned of more attacks with a spokesman putting pressure on Mr Abbas to resist a proposed ceasefire to help maintain calm in the run-up to the first presidential ballot in eight years.
"Calm cannot be achieved at the expense of Palestinian blood," Mr Mushir al-Masri said.
Further uncertainty could be in the offing after Israeli-Arab parliamentarian Mr Talab El-Sana said rebel leader Barghouthi told him during a visit that he might drop out of the election to avoid splitting his Fatah faction, which has backed Mr Abbas.
Barghouthi said he would hold discussions on a number of unspecified issues with Mr Abbas and other Palestinian Authority leaders and then he would "make his decision whether he will take part in the election or not".
Asked if he thought Barghouthi would run, Mr El-Sana said: "As far as [running for] head of the Palestinian Authority, he is considering the matter. A decision has not yet been taken."
"I believe in the end ... he will act responsibly and take a decision that serves the unity of the Palestinian people," he said after visiting Barghouthi in his Beersheba prison.
Barghouthi submitted an application through his wife last week to run in the election as an independent candidate. But Fatah leaders have since urged him to pull out of the election, saying that it could split Fatah, the dominant Palestinian faction founded by Mr Arafat.
Barghouthi represents a younger generation seeking greater influence after years of Mr Arafat's domination. He declared his candidacy last week, just days after originally ruling it out.
Polls show Mr Abbas neck-and-neck with Barghouthi, whose incarceration would pose problems for reviving long-stalled peace talks with Israel.
Agencies