"A preliminary inquiry ... has highlighted the faults in the operation carried out by the unit," it said in a statement, without elaborating.

The unit, which is part of the Israeli navy's elite commandos, has been suspended pending the investigation

Mahmud Hammad, 28, a leading member of the armed wing of the Palestinian group Islamic Jihad, was killed last Friday by the unit which raided a house where he was hiding in Raba, close to the town of Jenin.

The Israeli troops opened fire in his direction as he was giving himself up, according to Palestinian security sources.

The owner of the house in which Hammad had taken refuge said the militant had first been wounded by Israeli fire as he was trying to flee the scene, and then killed.

"He tried to escape. They opened fire at him in front of the house and wounded him. Once they got confirmation he was the man they were after, they finished him off," Suleiman Qasrawi told AFP.

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