Israel and the Palestinians plan to resume peace negotiations this week for the first time in nearly three years.
The move came after an intense effort by US Secretary of State John Kerry to bring them back to the table.
The talks are scheduled to resume in Washington tomorrow evening and on Tuesday.
They will be conducted by senior aides to Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmoud Abbas, the State Department said.
Middle East analysts voiced scepticism that the talks might lead to a peace treaty to end the more than six-decade conflict that has defied two decades of US efforts to broker a solution.
Even getting the Israelis and the Palestinians to agree to resume talks required great effort by Mr Kerry.
Mr Kerry made six trips to the region in the last four months, an unusual amount of time, to coax them back.
The Israeli Cabinet on Sunday approved the release of 104 Palestinian prisoners, with 13 ministers voting for the release, seven against and two abstaining, an Israeli official said.
The last round of direct negotiations broke down in late 2010.
It is unclear how the US hopes to bridge the core issues in the dispute, including borders, the future of Jewish settlements on the West Bank, the fate of Palestinian refugees and the status of Jerusalem.
Earlier today, Mr Netanyahu had urged divided rightists in his Cabinet to back the prisoner deal.
Israeli Channel 1 television said prisoners would be released in three stages, depending on progress in the talks, with a group of Israeli citizens left until the last stage.
Mr Abbas has demanded the release of prisoners held since before a 1993 interim peace accord took effect.