Israel said on Sunday it would not ease restrictions on movement and access for Palestinians in the West Bank unless the Palestinian leadership moved more forcefully against armed groups threatening violence against Israelis.

The announcement by Ehud Olmert, prime minister, followed the killing of two Israeli citizens near the West Bank town of Hebron on Friday. The victims – off-duty soldiers in their early twenties – were shot by Palestinian militants while hiking in the hills of their home town Kiryat Arba, a Jewish settlement on occupied Palestinian land near Hebron.

Speaking before the weekly cabinet meeting, Mr Olmert said: “As long as the Palestinian Authority does not take the required measures, with the required intensity, to fight terror groups, the state of Israel cannot make any changes that may expose it to dangers and create security hazards.”

“We do not intend to make any compromise on these issues and they will remain an inseparable part of our negotiations.”

Mr Olmert’s comments deal a blow to Palestinian hopes that the latest peace talks, launched last month at a US-sponsored conference in Annapolis, would mean swift improvements for ordinary Palestinians.

Mahmoud Abbas, PA president, has repeatedly urged Israel to lift the tight network of obstacles to freedom of movement for Palestinians in the West Bank.

The Gaza Strip, the other territory set to form part of a future Palestinian state, has been sealed off almost completely by Israel, after Hamas, the Islamist group, seized power there in June.

The World Bank and numerous other bodies say Israeli restrictions on movement and access are a key reason for the collapse of the Palestinian economy and have urged Israel to consider easing the curbs.

Mr Olmert’s government insists the restrictions and Israel’s military presence in the West Bank are necessary to protect Israeli citizens.

The Palestinian Authority announced at the weekend it had arrested several suspects for Friday’s killings.