A US-backed Middle East peace plan was under new strain on Thursday after the main Palestinian militant group Hamas warned that a cease-fire would unravel unless Israel freed thousands of prisoners.

A Palestinian woman holds up pictures of her son who she says is held in an Israeli jail, during a protest march in the northern West Bank town of Jenin July 9, 2003. The main Palestinian militant group Hamas said that a cease-fire declared under international pressure would unravel unless Israel freed thousands of prisoners.[Reuters]

Adding to tensions over the prisoner issue, Palestinian witnesses said Israeli soldiers had detained three Palestinian boys playing outside a flashpoint Jewish settlement in the West Bank.

The truce was declared by Palestinian militant groups at the end of June, but many Palestinians think Prime Minister Mahmoud Abbas has failed to win enough back from Israel in return.

Up to 8,000 Palestinians, including minors, have been arrested since an uprising for independence began in September 2000.

Israel has said it will release hundreds of prisoners, but will not free anyone accused of being behind suicide bombings and ambush attacks.

However, Hamas founder and spiritual leader, Sheikh Ahmed Yassin, warned on Wednesday militants could not stick to the truce unless jailed comrades were freed.

"Our patience has its limits. Israeli practices (including) the issue of the prisoners, are a red line that can never be bypassed in any way or form," Yassin said.

Israel dismissed conditions set by militant groups, saying it would deal only with Abbas's Palestinian Authority.

In a move aimed at strengthening Abbas's hand, the United States announced $20 million in direct aid to the Palestinian Authority (PA).

"BOYS BLINDFOLDED, DETAINED"

Yassin and other militant factions are currently holding talks with a visiting Egyptian security delegation trying to shore up the truce which has been rattled by violence this week.

Israel killed a Palestinian man in a West Bank raid on Wednesday and a Palestinian suicide bomber killed an Israeli woman on Monday.

Late on Wednesday, Palestinian witnesses said Israeli soldiers had detained three boys, aged 10 and 11, who were taken away, bound and blindfolded, from their home village of Aurif, near the city of Nablus, around nightfall.

Israeli military sources confirmed three Palestinians had been arrested in the area which abuts the Jewish settlement of Yitzhar.

A military source said the boys were "under investigation for actions hostile to Israeli military forces."

Abbas on Wednesday denied reports he was considering quitting and called on Israel to free all detainees "as soon as possible."

Israel should also withdraw forces from more Palestinian cities and cease settlement-building on occupied land, he said.

Israel has already withdrawn some forces in Gaza and the West Bank. (With additional reporting by Mohammed Assadi and Arshad Mohammed in Washington)

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