Palestinians voted in large numbers Wednesday in their first parliamentary election in a decade. Margaret Warner reports from Ramallah.

JIM LEHRER: Margaret, hello.

MARGARET WARNER: Hi, Jim.

JIM LEHRER: What can you tell us about the latest on winners and losers?

MARGARET WARNER: Well, Jim, we just drove back here to the official announcement center through a throng of horn-tooting cars, vans, trucks in the central market square of Ramallah, mostly Fatah members, that is, members of Yasser Arafat's -- the party he founded - Fatah -- shooting guns into the air.

But the fact is it's all very premature. There are no official results. It's 11:30 at night here.

There are exit polls that show Fatah winning from the low 40s to the mid 40s and Hamas, the radical group that's been branded a terrorist group, winning from the upper 30s to the mid 40s. But, as we know in the states, exit polls should only be trusted so far.

I think the more interesting numbers were the turnout numbers. And I think they tell a story. And that is that the turnout was an astonishing nearly 78 percent. But the difference between Gaza, which is really a Hamas stronghold on the West Bank, Gaza had higher turnout by seven or eight points, and the highest turnout was actually in that southern part of Gaza, which is considered the most radical, Rafah.

And the man we profiled last night, Ghazi Hamad, was running from there, 89 percent. So, that said, you know, it's a very complicated system here. People vote for two nationalists and a local candidate. I think it will be tomorrow before it's all sorted out.

JIM LEHRER: But is it premature to say that there's going to have to be a coalition government -- that neither one of these parties is going to win an outright majority?

MARGARET WARNER: Well, actually, I think it's fair to say that: That whatever happens, however it ends up, I think it's unlikely that Fatah is going to win the 50 percent plus one that they would need to govern alone.

And the question is whether they turn to Hamas to come into the coalition with them, or whether they have enough that they can go to some of these secular independent parties and put something together with them.

JIM LEHRER: Now, you were out at some of the polling places today. What was the mood? What did the people tell you when you talked to them about what they were -- how they were voting and why?

MARGARET WARNER: Well, it was interesting. I would say the mood among the voters was purposeful and proud but not starry-eyed. That is, one man said to me, he's a plumber. He said this is a great day for Palestinian democracy. It shows, you know, we finally have a real choice. I mean, they've had elections before but it's always been Fatah-dominated.

And now they have two parties with real bases and different points of view. And they're very proud of that. But in the next breath he said, but, of course, whatever government is elected has limited power because we're not a real state. He didn't use the word "sovereign state" but that's what he was saying -- and we're still under occupation.

They also, having voted before, have had the experience of voting and then being disappointed. They're not cynical yet at all. Obviously you wouldn't have a 78 percent turnout if they were cynical. I think they're realistic, and I think they were very proud to take part.

JIM LEHRER: Is there a general feeling among voters and others there that Fatah and Hamas can work together?

MARGARET WARNER: Well, that is the $64 million question because Hamas, the Hamas people we've talked to said that they wouldn't even decide what they would do, despite all these quotes you're hearing about we won't give up weapons and we will go in government, we won't go in government, they're going to have to have a big meeting after this election to decide.

So I think they both have been sending signals to the other that they'd like to work together but I spoke tonight to someone working very closely with President Abbas who really has not been campaigning here. That was part of the rules. He wasn't allowed to go out and campaign for Fatah but he knows he has to send a signal, I'm told, to the international community that, hey, you know, don't be scared; I'm still in charge.

So he is, as soon as the results are out, if they get at least the most votes Fatah does, the plan is for him to come out and say I've appointed Mr. X prime minister. I've given him clear direction. He can invite anyone into the cabinet as long as they accept three things, and the third will be negotiating with Israel.

So there's just a lot of uncertainty right now. And Hamas has to decide, as they've told me, whether they'd rather stay in opposition in the parliament and sort of play the provocateur role or whether they want to come in government and get a couple of ministries that they would like to have.

JIM LEHRER: And, of course, isn't Hamas still officially on record as calling for the destruction of Israel?

MARGARET WARNER: Yes. Now, they will say technically we don't call for the destruction of Israel.

The phrase in the charter is, as I understand it, they are fighting for a Palestine from the Jordan River to the sea. Well, since Israel stands between the Jordan River and the sea it's effectively calling for the destruction of Israel.

Yes, and there were some quotes from Hamas leaders today. I didn't speak to them, saying we'll never change a word of our charter.

So that's going to be an issue. You remember, this happened with the Palestinians back what, 13 years ago.

JIM LEHRER: Right.

MARGARET WARNER: And it was a big struggle before, you know, you could have the handshake on the White House lawn, the Oslo peace process, for them to abandon some provocative words in their charter.

JIM LEHRER: Now, going into this finally, Margaret, there was much concern or much speculation as to how Israel and the United States and the European Union would see and deal with the government if it in fact had elements of Hamas in it. Are they still talking about it, still wondering about that now?

MARGARET WARNER: They are. And I did speak to someone in the -- high up in the Israeli government today who said -- they had had a big conference call this morning. We're not saying a word. And even tomorrow they'll probably hold their fire. They're waiting for a signal from Mahmoud Abbas. And he said to me, now, if President Abbas says we welcome Hamas into the cabinet, well, that's one thing, no condition.

JIM LEHRER: Sure.

MARGARET WARNER: If Abbas says we welcome them into the cabinet but only if they disarm, that's something else. So it's going to be a chess match here. The other thing Israel knows it has to do is to be consulting with the United States. So I would say the next move is President Abbas's.

JIM LEHRER: Back to the election itself before we go. Is it the general feeling that this was a successful election day? Are there any allegations of fraud or any kind of unseemliness at the polls or anything like that?

MARGARET WARNER: No, Jim, and, in fact, to the contrary. It was actually impressive. We went to two polling places one in a Hamas stronghold, a working-class city near Ramallah and then one in Ramallah, which is more Fatah.

In every case they were totally prepared for this huge turnout. You were always in schools; you could check your name. You knew which classroom you went to. You went in. There were plenty of places to go. People didn't have to wait in long lines. You didn't see people leaving in disgust because they couldn't find their name, because they couldn't vote. It went unbelievably smoothly.

And there was heavy, heavy security. Both places we went, there were at least 50 security troops, both police in their blue uniforms and the national security forces in their olive drabs holding Kalashnikov rifles. And they were very helpful to the voters but they were also very firm. They only let voters in or those of us with special passes. And they just kept things calm. And so all the premonitions and all the predictions of violence at the polls, none of that happened, and they're very, very proud of that.

JIM LEHRER: All right. Margaret, thank you very much.

MARGARET WARNER: Thank you, Jim.