Updated

The Palestinian parliament passed a compromise election law Saturday afternoon removing a major hurdle to new legislative elections that were originally scheduled for next month but were postponed indefinitely.

The new law would create a mixed electoral system, with half the lawmakers chosen by districts and the other half chosen from a national slate of party candidates.

Earlier this month, Palestinian leader Mahmoud Abbas (search) announced the postponement of the parliamentary elections, saying that without a new election law there was not enough time to hold them as scheduled in mid-July.

No new election date was set, prompting a lukewarm response from a militant Islamic group, which has won a number of key races in recent local election and appears poised to make a strong showing in the legislative election as well.

"What's important here is to have a timetable to approve the election bill, finally, officially, and for it to be adopted and for a date to be chosen for holding the election with the coordination with the Palestinian factions," Hamas spokesman Sami Abu Zuhri (search) said.

Parliament Speaker Rauhi Fattouh (search) said he expected new elections to be scheduled for January.

"In our last meeting with [Abbas], he said that after the law is ratified, he will discuss the issue with the factions and then set a date," he said.

The postponement was widely seen as an attempt by Abbas to give his struggling Fatah party time to fend off the growing challenge from Hamas (search), which will be participating in parliamentary elections for the first time.

The Palestinian leader had opposed the previous election law passed by parliament that called for two-thirds of the lawmakers to be chosen in district elections, a system many believed would enhance Hamas' strength because they have strong regional appeal. Abbas proposed that all lawmakers be chosen at the "national" level.

Under the new law, which was a compromise between the legislature and Abbas, the number of lawmakers will be increased to 132 from the current 88 legislators. Half the lawmakers will be chosen in elections from 16 districts, while the remainder will be chosen from party lists.

The law passed by a vote of 43 to 14. It must be signed by Abbas to take effect. His office had no immediate comment.

"Now the ball is in the President Abbas' court. There is nothing left but to set a date for the elections," said Hassan Khreisha, deputy parliament speaker.

Recent surveys have shown growing dissatisfaction among Palestinians with Abbas' Fatah party and the movement's corruption.

In March, Hamas and other Palestinian factions agreed to honor a cease-fire reached between Abbas and Israel. As part of the agreement, Abbas promised the militants an official role in Palestinian decision-making.

Hamas had threatened to walk away from the truce with Israel if Abbas delayed the elections, but subsequently backed down.

The current parliament was elected in 1996. Elections were scheduled several times since then, but subsequently canceled. The late Palestinian leader Yasser Arafat said he could not hold elections as long as Israeli troops controlled the West Bank and Gaza.