It has been Hamas' first foray into parliamentary elections

The BBC's Martin Asser examines the consequences.

How much of a shock is a Hamas victory?

A big shock. Almost no one was predicting that Hamas would win a clear majority in the Palestinian parliament.

Even the exit polls put the mainstream Fatah party - which has dominated Palestinian politics since the 1960s - ahead by a few percentage points.

Most observers had been predicting a hung parliament with the two sides forced into a coalition.

However, the signs of deep dissatisfaction with Fatah have been visible for years: its corruption, inefficiency, and lack of progress in achieving the Palestinians' national goals of independence and a just settlement with Israel.

So perhaps the world should not be that surprised by the win - though even Hamas will be surprised at the size of the victory.

What are the implications for Palestinians of Hamas forming a government?

Many Palestinians will have voted for Hamas because of its perceived discipline and integrity, and its strong anti-Israeli ideology.

It is still too early to say how these characteristics will manifest themselves in a Hamas-led Palestinian government.

Some of the lustre may well rub off when Hamas faces the realities of administration in the very tough circumstances of the Israeli occupation and the breakdown of order on the Palestinian side.

It will doubtless concentrate on the domestic side, tackling issues such as law and order, poverty and healthcare. The imposition of strict Islamic government is not expected.

The movement's charter and philosophy will probably come under intense scrutiny, as Fatah's did when Yasser Arafat set up the Palestinian Authority in the 1990s.

And a lot depends on whether Hamas will form a unity coalition with Fatah - as it says it wants to - which may temper some of its hardline policies regarding Israel and a return to the peace process.

What are the implications for Israel and international diplomacy?

Some Palestinians argue that Hamas' participation in elections signifies a de facto recognition of Israel and a two-state peace deal, although Hamas denies this.

Israel says it will negotiate with the Palestinians if militant groups are disarmed.

Now the biggest armed militant group has taken control of the political sphere as well as the "resistance".

Most likely, therefore, is a continuation of the unilateral policy forged by Ariel Sharon in Gaza, and backed by acting Israeli PM Ehud Olmert: Withdrawal from occupied territory in the West Bank and a retreat to Israeli-drawn, defendable borders.

That is if the Kadima party wins the election due on 28 March. Hamas' victory may fuel support for the right-wing Likud party, which argued that Israel should have opposed elections in which Hamas took part.

The US and the international community are also in fix, and will demand major concessions from Hamas before they do business with it.

Hamas is currently maintaining a ceasefire, but remains committed to the armed struggle, the destruction of Israel and retaliatory attacks on Israeli civilians.

It is an open question what will happen to the large international aid budget received by the Palestinian Authority mainly from the European Union, which categorises Hamas as a terrorist organisation.

Who might become the Hamas prime minister?

It is ironic that the position of Palestinian prime minister was created in 2003 in response to US pressure to devolve power away from the powerful presidency of Yasser Arafat.

The position until now has held little importance. That will change dramatically with a Hamas incumbent invested with a popular mandate.

Hamas is led by a complicated and covert system that was established in response to Israel's assassination of several of its top leaders in recent years.

Some of its top leaders live in exile in Syria and Lebanon.

The top name on Hamas' electoral list was the Gaza political leader Ismail Haniya - considered a moderate in the movement's ranks whose position on the list was seen as an appeal to mainstream voters.

He would therefore seem a natural choice to become prime minister.

Another possibility would be Mahmoud Zahhar, also based in Gaza, a co-founder of the organisation with Sheikh Ahmad Yassin, who may be more hardline than Mr Haniya, but is believed to have been the leading advocate of Hamas' participation in the election.

What is the position of the Palestinian Authority President Mahmoud Abbas?

Hamas' victory does not directly affect the presidency of Mr Abbas, who was elected for a four-year term in office in January 2005.

It is his job to pick the prime minister, but he must do so in co-ordination with the largest party in parliament - Hamas.

It is the first time the Palestinian government has had a situation of "cohabitation" between the executive and legislative branches, and it is not clear how the relationship will take shape.

But such a powerful mandate for Hamas will clearly eat away at the authority Mr Abbas gained last year with his own crushing win in presidential elections - a contest that Hamas boycotted.

On the plus side for him, US Secretary of State Condoleezza Rice telephoned to tell him that the United States "would continue to back him and policies", according to his spokesman.

Washington has not confirmed the exact content of the conversation yet, but President George W Bush said during a news conference: "We'd like him to stay in power."