JENIN, West Bank (AP) – Palestinian gunmen killed an Israeli soldier during exchanges of fire at a militants’ hideout Thursday, as opinion olls showed that an earlier army raid of a West Bank prison boosted voter support for acting Prime Minister Ehud Olmert in the runup to March 28 elections.

The Islamic militant Hamas, meanwhile, said it will announce the final composition of its government by Friday and present it to Palestinian President Mahmoud Abbas for approval early next week. It appears increasingly unlikely Abbas’ Fatah would join such a coalition. Israel has said it would shun a Hamas-led government, a position backed by the U.S. and Europe which have threatened to cut off funds to a Palestinian Authority led by the militants.

The World Bank warned in a report released Thursday that cutting off international aid would devastate the struggling Palestinian economy, and that three-quarters of the Palestinians would live in poverty by 2008.

In Thursday’s raid in the West Bank town of Jenin, soldiers surrounded two hideouts, demanding the surrender of five fugitives from Islamic Jihad and the Fatah-linked Al Aqsa Martyrs’ Brigades.

A gunfight erupted, and an Israeli soldier was killed. The army said one wanted man ran out of a building early during the raid, and four others surrendered later.

The operation came two days after the army raided the Jericho jail, capturing six militants, including Ahmed Saadat, the suspected mastermind of the 2001 assassination of an Israeli Cabinet minister.

The raid had wide backing in Israel, but some questioned its pre-election timing. Olmert has flatly rejected allegations he ordered the raid to win the support of hardline voters.

Olmert’s Kadima Party had been sliding in the polls in recent weeks, to fewer than 40 of 120 parliament seats, still far ahead of its closest rivals, but raising speculation that a Kadima-led coalition would not be strong enough to implement its vision of West Bank withdrawals.

Some pollsters and analysts attributed the rise to the Jericho raid. “Jericho Effect,” read a banner headline in the Yediot Ahronot daily, above its poll results. In a poll by the independent Geocartography Institute, Kadima won 42-43 seats, up from 38 last week, said Avi Degani, head of the polling agency. However, Kadima’s rise cannot necessarily be attributed to the Jericho raid, because Geocartography had similar results in a survey conducted Monday, a day before the operation, he said.

Degani said 10 percent of the voters were still undecided, and another 30 percent were not fully committed to one party yet, making up a large group that could change the balance on election day. His poll of 500 people had an error margin of 4.3 percentage points. Other polls also had Kadima rising, but not passing the 40 seat mark.

Hamas, meanwhile, said it would hold a final round of coalition talks Thursday, decide on the composition of its government by Friday and present it to Abbas by early next week.

Hamas’ election victory in January has placed Abbas in the difficult situation: he will have to deal with a Cabinet controlled by a rival party and threatened by crippling economic sanctions.

Abbas has the right to veto the composition of a Hamas government, or ask that some ministers be replaced. However, Hamas controls a majority in parliament, and Abbas cannot impose a government of his choosing, since any Cabinet needs parliament approval.

Israel is leading efforts to isolate a Hamas government, an Islamic group sworn to Israel’s destruction. Israel has already suspended monthly transfers of tax revenue it collects for the Palestinian Authority. Israel says it fears the money, which totaled $740 million (¤615.33 million) last year, would reach the militants.

The World Bank warned Thursday that cutting of international aid could cause the Palestinian economy to contract by 27 percent and income levels to drop by 30 percent this year alone, levels comparable to a deep depression. Unemployment would reach nearly 50 percent by 2008, with three-quarters of the population living in poverty, defined as living off less than about $2.20 (¤2) a day, the report said.

The international community donated about $1.3 billion (¤1.08 billion) to the Palestinians last year. But Western donors, who provide the bulk of the assistance, have threatened to cut off the money if the incoming Hamas government does not renounce violence.

Hamas has so far rejected global calls to moderate its views, and instead has turned to the Arab and Islamic world for financial assistance. Iran has pledged to assist a Hamas-led government.