The Israeli government on Sunday allowed Palestinians living in East Jerusalem to vote in the legislative elections due on Jan. 25, clearing the way for the Palestinians to hold the polls as scheduled.

"It is a step forward toward ensuring Palestinian democracy in all the Palestinian territories which were occupied by Israel in 1967," chief Palestinian negotiator Saeb Erekat said. Earlier in the day, the Israeli cabinet, chaired by acting Prime Minister Ehud Olmert, passed a proposal to allow East Jerusalem Palestinians to vote in the polls.

However, the decision bars participation of the Islamic Resistance Movement (Hamas), a radical group sworn to Israel's destruction.

"I believe that Israel is not interested in seeing Hamas so powerful and be part of the Palestinian National Authority (PNA)in the future. The decision was to help the PNA to stop Hamas' challenge," said Isam Abu Warda, a Palestinian political analyst from Gaza.

The elections are expected to draw the political map of the Palestinians since a vast majority of political factions will participate.

Hamas boycotted the first legislative elections in 1996 in protest of Oslo Accords, which set in motion the Palestinian-Israeli peace track three years earlier.

The radical group said that it decided to join this year's elections because the Oslo Accords are not valid anymore. In response to the Israeli decision, a Hamas spokesman slammed Israel for not allowing Hamas candidates to campaign and vote in the polls.

Sami Abu Zuhri told reporters in Gaza that the decision was totally rejected by Hamas, saying it is putting obstacles before the movement and weakening Hamas' position in the elections. Musheer al-Masri, also spokesman for Hamas, said that the ban contradicts with Palestinian sovereignty.

"Israel does not have any right to deprive any Palestinian faction of practicing its right in the elections," said al-Masri, vowing that they will have their own means to campaign and vote, such as newspapers, radio stations and televisions. Votes will be cast at post offices in East Jerusalem, the same as in the 1996 parliamentary elections and the presidential elections in January 2005.

Palestinian media reported on Sunday that three Hamas candidates were arrested in East Jerusalem by Israeli policeshortly after Israel gave the go-ahead.

Among the arrested was Sheikh Mohammed Abu Tir, second on the Hamas list for the elections.

Sources said Abu Tir and two others were arrested when they were attempting to talk to journalists in the area when they were arrested and transferred to Jerusalem's Maskoubia Interrogation Center.

Abu Tir, 55, from the East Jerusalem neighborhood of Umm Tuba,does not have a high media profile in either the West Bank or Israel.

However, he is considered as one of Hamas' most prominent individuals.

Abu Tir told leading Israeli newspaper Ha'aretz on Sunday that Hamas does not rule out future negotiations with Israel and Hamashas made efforts to explain its policy to Israel and the world. He said Hamas' decision to stand in the elections and remove from its election platform calls for Israel's destruction are not only tactical measures, "This represents a strategic shift of the group."