MADRID, April 1 (Reuters) - The Basque separatist group ETA said on Tuesday it shot dead a former Socialist councillor just before last month's election, confirming widely held suspicions that the armed group was responsible. In a statement published in the Basque newspaper Gara, ETA said it had killed Isaias Carrasco outside his house in the northern town of Mondragon on March 7, two days before an election won by the incumbent Socialists.

He was shot five times at point-blank range in front of his wife and young daughter.

Gara also quoted ETA as saying it also carried out four bombings in the region in the run-up to the poll.

In a blow to the group, the Swiss Federal Prosecutor's Office said it had frozen 4.8 million Swiss francs ($4.77 million) in assets in two cases connected to ETA, the Swiss local news agency SDA reported.

The funds were frozen after an unnamed bank made a report to the Swiss police money-laundering unit and the Prosecutor's Office launched two investigations in 2006, spokeswoman Jeannette Balmer told SDA.

The Prosecutor's Office was not available for comment late on Tuesday.

ETA has killed more than 800 people in four decades in its fight for independence for the Basque Country in northern Spain and southern France, though polls show most Basques do not want independence.

Spain's Socialists, lacking an absolute majority in parliament, are negotiating with moderate Basque nationalist groups and other regional parties to find partners who will help push through legislation over the next four years.

ETA said that any political pacts that sought to "perpetuate the oppression and negation of a Basque Country" would do nothing but harm to the region and would prolong the conflict.

"Do you believe that ETA is going to stand with its arms folded while there are torture, arrests and life sentences or parties are banned with total impunity," ETA said in a message directed at Socialist supporters, referring to a pre-election ban on two parties for their links to ETA.

Prime Minister Jose Luis Rodriguez Zapatero broke off peace talks with ETA in December 2006 after it killed two people with a car bomb at Madrid airport. (Additional reporting by Sam Cage in Zurich) (Reporting by Ben Harding, editing by Tim Pearce)

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