The exit poll results in the Palestinian elections were wrong. Hamas has won an outright majority with 78 out of 132 seats (67 seats is a majority), the late Yassar Arafat's Fatah Party won 43 seats (down from a prior 68 seat majority), and minor parties won 11.
The Hamas model is reminicent of 19th century American political machines, providing libraries, sports clubs, finding jobs for people, and otherwise serving as a functional organization that provides social services, as well being involved in illegal activity (terrorism for Hamas, organized crime for the old political machines). This gives it a powerful grass roots presence that Fatah, a more conventional political party, couldn't match.
Israel and Bush Administration diplomats can't be pleased. The world will see how this decision plays out.