GAZA CITY, 19 August 2006 — Hamas set tough conditions yesterday for forming a coalition government. Addressing worshippers during Friday prayers, Palestinian Prime Minister Ismail Haniyeh insisted a Hamas member head the government, and that “all ministers and MPs” from the party arrested by Israel be freed as a prelude to forming such an administration.

“There will be no national unity government as long as ministers and elected officials are in Israeli prisons,” Haniyeh said. “They must be released, especially Aziz Dweik,” he said referring to the parliamentary speaker who after President Mahmoud Abbas is constitutionally the second most important official in the Palestinian Authority.

Dweik’s remand was extended Thursday and pictures of him appearing in an Israeli military court with his feet in shackles were beamed all day on television networks.

Haniyeh also said no unity government could materialize before Israel lifted its siege on the Gaza Strip, where the Israeli military has conducted a punishing offensive since June 28.

“Any government must insist on the end of the siege, the reason for which is that the government is led by Hamas,” he said.

Haniyeh’s remarks came as an aide to Ehud Olmert said the Israeli prime minister had put his proposal for a pullout from parts of the occupied West Bank on hold for now following the war in Lebanon.

The aide acknowledged that the prime minister’s more pressing priority for now was leading the recovery from economic damage in northern Israel caused by a month of rocket attacks by Hezbollah.

Meanwhile, Israeli soldiers killed three Palestinian fighters yesterday and wounded two other people in Gaza and the occupied West Bank, medics and witnesses said.

An army spokeswoman said two Islamic Jihad fighters near the West Bank town of Bethlehem were shot and killed when they resisted arrest and shot at troops.

In Gaza, Palestinian medics said they had found the body of a gunman from Islamic Jihad .