Israel is to release 540 Palestinians, including 210 Islamic militants, according to a senior Israeli official.
He was speaking during a refuelling stop at Brize Norton in England for Prime Minister Ariel Sharon's plane as he headed for Washington.
The official said the prisoner release 'should happen in the coming week'.
Earlier, Israel's cabinet voted to release up to 100 Hamas and Islamic Jihad prisoners.
Ministers voted by 14-9 to free the militants, which reports said was a goodwill gesture toward the Palestinians ahead of Prime Minster Ariel Sharon's visit to Washington this week.
US President George W Bush met Palestinian Prime Minister Mahmoud Abbas on Friday.
Mr Bush wants both sides to fulfil their commitments under the 'road map' peace plan, which aims to bring an end to violence and establish a Palestinian state by 2005.
Palestinians want all the estimated 6,000 prisoners in Israeli jails to be freed.
