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JERUSALEM (Reuters) - Israel said on Sunday it will withhold the bodies of Palestinian militants killed in attacks against its citizens as it seeks to pressure the Islamist movement Hamas to return the remains of soldiers and hand back missing Israeli civilians.

Hamas says it is holding two Israeli soldiers whom the army declared dead after they were lost in action in the 2014 Gaza war. The group also says it is holding two Israeli civilians who strayed into the Hamas-ruled Gaza Strip.

Israel's security cabinet, a forum of senior ministers, made the decision on Sunday, enacting what it said would be a permanent policy for dealing with the bodies of militants.

"The security cabinet discussed ways to effect the return of fallen soldiers and of civilians held in the Gaza Strip ... and decided that (the bodies of militants) should be buried, rather than returned," the statement said.

Under the new policy, the bodies could be exhumed and handed back for burial if Hamas was willing to strike deals. It marks a hardening of Israel's stance: during 2016, according to the Israeli army, 102 bodies were returned for burial.

Israeli officials have previously signalled they are willing to repeat past amnesties of jailed Palestinians in order to recover the two soldiers' remains and the civilians held by Hamas. But Hamas has said Israel must make a preliminary release of prisoners before it will discuss such a deal.

(Writing by Ori Lewis; Editing by Mark Trevelyan; Editing by Mark Trevelyan)

Reuters