It would be an interesting attempt to get around the sanctions against Hamas, but it would mean that Hamas would publicly revert to being nothing but a terror group again. On the other hand, an avowedly political-only Muslim Brotherhood party would very possibly defeat Fatah; it is unclear if Hamas would win a new election today.
Sources in the Hamas told Al Hayat that the movement's leadership and its political bureau have discussed the proposal in depth, adding that some in Hamas found it appropriate, especially as the movement grew out of the Muslim Brotherhood in Gaza and the West Bank. The idea is opposed by others saying that it would lead to the weakening of Hamas as a resistance movement by turning them into a [purely] political party.
Some of the leaders of Hamas considered the establishment of a new political party under the party name "Freedom and Justice" to run in the next election and work in the parliament and government and to allow Hamas, as the resistance movement, to avoid the complexities of working in parliament and government. The sources said that the idea has been discussed at various levels, but the movement is not ready for such a move at this stage.
Right now Hamas claims that its military and political arms are separate, but that is obviously a lie - most Hamas police moonlight as Qassam Brigades terrorists, and Nizar Rayan had served as a liaison between the two before the IDF killed him. A separate, purely political "Freedom and Justice" party would be equally a fiction but it would convince credulous Westerners that a moderate Islamist party could be the key to unlock the PA government impasse.