Israel has announced that it will release 170 Palestinian prisoners within days after the move won ministerial committee approval.
The release is part of an agreement with Egypt, which had earlier freed an Israeli spy.
Egyptian President Hosni Mubarak released Azzam Azzam earlier this month after he served seven years of a 15-year sentence.
At the time Israeli Prime Minister Ariel Sharon said he was willing to release some of the 8,000 Palestinians in Israeli detention as a gesture of goodwill towards Mr Mubarak.
The move is also seen as a boost to Mahmoud Abbas, the moderate PLO leader who is bidding to replace the late Yasser Arafat as president of the Palestinian Authority.
