As a rule of thumb, yes. But one can easily focus on both strength and size at the same time.
Strength and fat loss is doable but far from optimal.
Fat loss and size is also doable but requires very precise nutrition AND weekly adjustments. But it might be a fairly slow process,
So yeah, it would seem that focusing on one main goal at a time is the way to go.
DO NOT let yourself gain too much fat just for the sake of adding muscle. This is especially true if you aren't lean to start with. You should still eat quality foods (see my Getting lean thread) but just more of it. Too many people take the "I'm gaining" excuse to eat fast food, pizza and the likes.
DO NOT stop lifting heavy when trying to lose fat. Keeping at least some heavy lifting, trying to maintain your strength (o even increase it) when dieting down is the best way to keep your muscles.