(Adds Hasina's comment, byline)

By Nizam Ahmed

DHAKA, July 22 (Reuters) - Students and teachers at Bangladesh's biggest university held a one-day strike on Sunday to protest against the arrest of former prime minister Sheikh Hasina, defying emergency laws.

Most of the 30,000 students and 4,000 staff of Dhaka University joined the boycott of lectures and classes, and many chanted slogans and marched around the sprawling campus, demanding Hasina's release.

"We abstained from duties to protest against the arrest and harassment of former prime minister Sheikh Hasina," Sadrul Amin, president of the Dhaka University Teachers Association, told reporters.

Hasina, chief of the Awami League, was arrested at her home on July 16 and sent to jail to face extortion charges.

Police filed two cases against Hasina in June for extorting 80 million taka ($1.16 million) from two businessmen. Her arrest was related to one of the cases.

Sunday's strike was peaceful but authorities tightened security around the campus amid threats of more protests.

Hasina urged her supporters "not to be disheartened and remain prepared to stand against all injustice in the country", her lawyer Sahara Khatun told reporters after meeting Hasina on Sunday. A group of lawyers was preparing to launch a legal battle to secure Hasina's release.

Zillur Rahman, acting president of the Awami League, alleged persecution of party members by security forces across the country.

"I urge upon the government not to arrest and harass party workers on fictitious grounds," he told reporters on Sunday.

Bangladesh has been under a state of emergency since January, when an army-backed interim administration took over and launched a crackdown on politicians ahead of elections planned for late next year.

Political activities and public protests have been banned under emergency laws which the administration says are necessary to fight corruption.

More than 170 political figures have been detained for alleged graft and abuse of power.

On Sunday, a former lawmaker from the Bangladesh Nationalist Party was jailed for 20 years for amassing wealth illegally.

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