BEIT HANOUN, Gaza Strip (Reuters) - Palestinians voted on Thursday in the first municipal elections in the Gaza Strip, a test of strength between new President Mahmoud Abbas and the militant Hamas group.

Thousands turned out in the early hours of the poll to cast their ballots for candidates vying for 118 seats in 10 municipal councils throughout the territory, where Israeli-Palestinian violence has dropped sharply over the past week.

Abbas has been trying to coax a cease-fire from militants spearheading a 4-year-old revolt and prevent a chaotic power vacuum in Gaza when Israeli troops and settlers withdraw this year under Prime Minister Ariel Sharon´s "disengagement plan."

An end to bloodshed is also key to reviving a U.S.-backed peace road map whose final stage is the creation of a Palestinian state alongside a secure Israel.

But Israeli Foreign Minister Silvan Shalom said a truce in itself, without any move by Abbas to disarm militant groups as stipulated by the peace plan, was no solution.

"A cease-fire is a ticking bomb that will explode in our faces. Therefore a cease-fire cannot be a long-term goal -- certainly not when (militant factions) are preserving their infrastructures," he told Army Radio.

U.S. envoy William Burns was due to hold talks later in the day with Abbas and Sharon to start exploring ways of moving forward along a path of reciprocal confidence-building steps charted by the violence- stalled peace blueprint.

Preparing the ground for an as yet unscheduled Abbas-Sharon summit, Israel and the Palestinians resumed high-level diplomatic contacts on Wednesday after a two-year break.

"The summit may take place around Feb. 8 if preparations are completed," a Palestinian official said.

Israel boycotted Abbas´s predecessor Yasser Arafat in the final years before his death, branding him an "arch-terrorist," which he denied. But it has welcomed Abbas´s rise on a pledge of quiet to enable road map talks.

REBUILD TRUST

Shalom, speaking from Washington after meeting newly confirmed Secretary of State Condoleezza Rice, said it was too early to talk about resuming talks on a final peace treaty.

"She intends to be very active," Shalom said about Rice´s future role in trying to achieve a settlement.

"I said that taking a step toward a permanent status agreement would be doomed to fail. I think that this was done in the past and did not succeed, and may have even brought about (the Palestinian uprising)," Shalom said.

"There is a deep lack of trust between the sides, and thus this trust has to be rebuilt, step by step."

Across the Gaza Strip, Palestinians began forming lines at polling stations even before they opened in the morning under sunny skies.

"The election is our way of getting rid of corruption," Mohammed Abu Harbeed, a supporter of pro-Hamas candidates.

Hamas and Islamic Jihad, sworn to the Jewish state´s destruction, have won many hearts during the conflict and pose a challenge to the two-state diplomacy pursued by the dominant Palestinian Authority faction Fatah.

Hamas made significant inroads in last month´s West Bank municipal elections in which the mainstream Fatah made the strongest showing.

The Islamist group, which runs a social welfare network, is generally even more popular in cramped, coastal Gaza, where 1.4 million Palestinians live in often dire poverty. (© Reuters 2005 01/27/05)