Two days ahead of the vote the gap between the two main parties was narrow, but pollsters said Fatah appeared to be making a last-minute surge in the race for the 132-seat Palestinian parliament.
A poll by the West Bank's An-Najah university predicted Fatah should win 42 percent of votes against 34 percent for Hamas, with three smaller parties holding the balance of power.
Palestinian pollster Khalil Shikaki predicted Fatah would win 47 percent of votes while Hamas would secure 42 percent.
Hamas, the group responsible for the majority of suicide attacks on Israel during a five-year Palestinian uprising, has become increasing popular with disaffected Palestinians in recent years.
It has won over voters with a platform stressing clean government and an end to Fatah's corruption.
But with many Palestinians weary after five years of fighting with Israel, the group has played down its violent ideology, though it says it remains committed to armed struggle.
Talks 'possible'
In its last day of campaigning Hamas unleashed a verbal attack on Israel but also left the door open to negotiations, in a mixed message aimed at shoring up last-minute support.
Mahmoud Zahar, a top Hamas candidate in Gaza, said the group might be willing to negotiate with Israel through a third party.
"Negotiations are not illicit. However to sit down with Israel and smile and falsely claim to be making progress when it's not the case would represent a political crime and we are not going to deceive the Palestinian people," he said.
Hamas does not recognise Israel’s right to exist.
"If the Israeli enemy has propositions concerning an end to their aggressions, for more retreats or for freeing our prisoners, we could find a thousand ways" to forge contacts, he said.
But the group's exiled supreme leader, Khaled Mashaal, ruled out talks with Israel. "We don't have to make concessions to satisfy Israel," he said in a television interview.
Fatah confident
Candidates from the ruling Fatah movement wrapped up their campaign on Monday by joining hundreds of supporters on a pilgrimage to Yasser Arafat's home in Gaza, hoping to turn the memory of the iconic leader into crucial votes.
A giant poster of the deceased leader and smaller posters of Fatah fighters hung from a stage, where 2,000 party supporters pledged their commitment "to the blood of the martyrs, to the wounds of the wounded, to the suffering of the prisoners - and to vote for the Fatah list."
Buoyed by opinion polls giving it an eight-point lead over Hamas, campaign chief Nabil Shaath predicted Fatah would win a big majority.
But Hamas’s strong showing in polls means it is all but certain to be entering government.
Israel has said it will refuse to do business with a Palestinian government that includes Hamas, at least while it continues to advocate violence.
Hamas's participation after boycotting the only previous election in 1996 is seen by some observers as a sign of a growing moderation of the movement.
The smaller Islamic Jihad movement, behind the most recent suicide attacks, is boycotting Wednesday’s poll.
Hundreds of its supporters marched through Gaza City on Monday to denounce the election.
The Al-Aqsa Martyrs Brigades, militants nominally loyal to Fatah who have attacked election offices in recent weeks, ordered its members not to interfere with the process.
Call for calm
Palestinian leader Mahmoud Abbas reiterated his appeals for the vote to pass off peacefully.
"I hope the elections on Wednesday will proceed calmly and that the democratic process and the results are respected," he told reporters.
Around 1.34 million Palestinians will be eligible to vote, with pollsters predicting turnout will top 85 percent with voters energised by having a first real alternative to Fatah.
Half the 132 deputies will be elected from party lists and the rest in constituencies.
Hundreds of foreign observers, including former US president Jimmy Carter, will oversee the vote.