Israel will negotiate with a Hamas-Fatah unity government if the Islamic group recognizes Israel and renounces violence, Prime Minister Ehud Olmert said in a rare interview published Monday in a Palestinian newspaper.

The European Union will also insist that any new Palestinian unity government respects international demands to recognize Israel, renounce violence and commit to new peace talks, a top EU official said Monday.

Olmert's interview was published as the top leaders of the emerging unity government were emerging.

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According to officials, the top three posts in the government - prime minister, foreign minister and finance minister - would be held by pragmatists who could persuade the international community to lift debilitating economic sanctions.

A Hamas official based in Damascus said Monday that Hamas and Fatah had agreed on former Islamic University president Mohammed Shabir as the next prime minister.

Another official said later Monday that the deal would be signed in Cairo, though no date has been set yet for the ceremony. However, negotiators have reported progress and have said they hope to reach agreement by the end of the month.

Israel will have contacts with the government if it adopts the international community's three principles - recognizing Israel, renouncing violence and accepting existing peace deals, Olmert told the al-Quds newspaper, an Arabic-language newspaper based in Jerusalem.

"I don't think it is necessary to investigate the records of the [Hamas] ministers," Olmert said, pointing out that Israel negotiated with the Palestinian Liberation Organization even though it was long considered a terrorist group.

Hamas has so far rejected the international conditions, and the new government will apparently be vague on the principles.

In the interview, Olmert again extended a hand to moderate Palestinian Authority Chairman Mahmoud Abbas, saying he would be willing to release "a large number" of Palestinian prisoners, but not before Hamas militants release Corporal Gilad Shalit, a soldier captured in a cross-border raid in June.

"I give Palestinians my word of honor," Olmert said. "You will see how far I will go to allow your sons to return to their houses."

Olmert again apologized for Israel's killing last week of 19 Palestinian civilians in the northern Gaza town of Beit Hanoun. Calling the incident a "tragedy," Olmert said it was caused by a technical problem in the artillery that fired the errant shells.