The United States spent $2.3 million in USAID on support for the Palestinian elections, allegedly designed to bolster the image of President Abbas and his Fatah party. USAID's Offices used discretionary spending accounts for various projects, including tree planting, schoolroom additions, a soccer tournament, street cleaning, and computers at community centers. USAID removed its usual branding requirement on its sponsored activities. As a result, the US was accused of trying to influence the outcome of the elections.[8] The European Union supplied election observers to "assess the whole election process, including the legal framework, the political environment and campaign, electoral preparations, voting and counting as well as the post-election period".
Before the 2006 elections, the PLC was dominated by the Fatah movement, which held 68 of the 88 seats. However, Fatah had been beset by internal strife, with younger and more popular figures like Mohammed Dahlan (who took part in the negotiations of the 1993 Oslo Accords) and Marwan Barghouti (serving five life sentences in an Israeli jail on terrorism charges) levelling allegations of corruption against the Fatah leadership. Fatah organised primary elections to determine its candidate list, but the results were disputed and central lists were imposed in some areas. The younger faction submitted a list dubbed Al-Mustaqbal ("the Future"), headed by Barghouti. However, on 28 December 2005, the leaders of the two factions agreed to submit a single list to voters, headed by Barghouti, who actively campaigned for Fatah from his jail cell.[13] Despite this, the two groups were by no means fully reconciled.