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Mr Jammeh, 46, faces Ousainou Darboe, leader of the United Democratic Party, and Hamat Bah, who is being backed by a coalition of four opposition parties.
"The preparations and political environment for the said election are adjudged by the commission not to be conducive for the conduct of free, fair and transparent polls," the 15-state West African bloc said in a statement.
It said its investigations found "an opposition and electorate cowed by repression and intimidation".
Ahead of the presidential poll in 2006, Ecowas urged the opposition not to boycott the elections and endanger the "democratisation of the country".
Mr Jammeh's government has been criticised by international rights groups for its attitude to civil liberties, especially freedom of the press.
Correspondents say there are very few posters for the opposition candidates around the country.
Giant campaign billboards can be seen in the capital, Banjul, reading that Mr Jammeh is a "master peace maker and champion nation builder", AFP news agency reports.
"True peace is not merely the absence of tension; it is the presence of justice." Dr. Martin Luther King Jr.
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