The move follows a wave of sporadic political violence in Gaza -and to a lesser extent in the West Bank - during the past two months which has mainly flared between rival groups within the dominant Fatah faction.
The prediction that Gaza may not be secure enough to allow monitors to visit polling stations on election day, 25 January, could make it more difficult for the international community to establish the legitimacy of the election process there.
It also comes soon after an explicit threat to kidnap European monitors in the video issued on 31 December by the militants who seized the British human rights activist Kate Burton and her parents in the Gaza town of Rafah.
There have also been implicit threats against EU monitors in the West Bank cities of Nablus and Jenin, though the EU monitoring team said it still expected to provide a detailed monitoring service there similar to that in the Legislative Council (PLC) elections in 1995 and in the presidential election in 2005.
Of the 32 EU monitors already in the occupied territories, there is a "core team" of two monitors operating in a secured building in Gaza, augmented by another four who are commuting in and out of Gaza on short visits. Another 130 observers had been scheduled to be in post by election day. In last year's presidential election, eight two-person teams made sample visits to Gaza polling stations on election day.
Richard Chambers, the deputy head of the EU's monitoring mission, a Briton, said yesterday that Central Election Commission officials, candidates, and campaign team members were visiting the Gaza monitors at their base. This meant monitors were carrying out "an assessment of the election process rather than an observation". He added: " If the election process goes ahead it is important that there should be adequate levels of security for us to operate. The specific security environment in Gaza may prevent us having short-term observers there on election day."
Mr Chambers said those fomenting violence appeared to be groups attempting to secure postponement of the polls in the wake of disagreements over the composition of the Fatah list between "old guard" and "young guard" factions.
Mahmoud Abbas, the President, was forced to halt candidates' primaries in Gaza last month after some of these led to burning of ballot boxes, ransacking of election offices and exchanges of gunfire. There have been fears that violence could flare on election day after Nasser Yusef, the Palestinian Interior Minister, said he was not confident of guaranteeing security at polling stations.
A compromise between the two Fatah groupings was reached with a unified candidates' list after Ahmad Qureia, the Prime Minister, and his "old guard" ally Rauhi Fattouh, the former speaker of the PLC, dropped out of the race after refusing to be allocated places on a district list. Mr Qureia has been among those calling for postponement.
Mr Chambers said a clear statement that the elections were going ahead on 25 January might lead to a reduction of violence, which he said had abated in the past two days - coinciding with the Muslim festival of Eid. This is unlikely to happen before Sunday, when the weekly meeting of the Israeli cabinet is likely to approve a compromise under which 6,000 East Jerusalem residents will be able to vote in five Israeli-manned post offices. A refusal to allow such voting because of Hamas's participation was threatening a delay.
An absence of short-term monitors in Gaza, Mr Chambers said, might "impair the credibility of the election process" but pointed out that candidates, campaign managers and local monitors would still be able to bring suspected cases of abuse to the EU team. He said Palestinian internal arrangements and election co-ordination between Israel and the Palestinian Authority, had improved since last year. "There are quite a few positive signs but there is just this shadow of potential violence which almost all the factions we have spoken to, including Hamas, seem not to want."
The leading candidates
If the elections go ahead as scheduled on 25 January, 728 candidates will compete for 132 seats on the Palestinian Legislative Council, the Palestinian parliament.
A total of 414 candidates will contest 66 seats under a first-past-the-post system by district constituencies - ranging from one seat representing Jericho to eight for Gaza City. And 314 candidates from 11 parties will contest another 66 seats elected by a national proportional list system.
The main parties, along with their number one candidate on the national list, and the total number of national list candidates:
* Fatah: Marwan Barghouti - popular "young guard" Fatah leader who is currently in an Israeli jail in connection with five killings during the intifada; 45 candidates.
* Reform and Change (Hamas): Ismail Haniyeh - leading figure in Gaza); 59.
* The Third Way: Salam Fayad - former PA finance minister; 25.
* Independent Palestine: Mustafa Barghouti - independent leftist challenger to Mahmoud Abbas last year; 41.
* Popular Front for the Liberation of Palestine: Ahmad Sadat - PFLP secretary general jailed in Jericho, now under British-US supervision, in connection with PFLP-claimed killing of Rechavam Ze'evi, an Israeli cabinet minister, in October 2001; 50.
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