Israel began an operation to free 26 Palestinian prisoners on Tuesday hours before the two sides were to hold new direct peace talks amid a growing row over settlements.
Buses carrying the inmates, most of whom were held for attacks on Israeli citizens, left Ayalon prison in the centre of the country late on Tuesday.
Palestinian and Israeli negotiators began direct talks two weeks ago for the first time in three years.
Israelis and Palestinians are set to launch talks in Jerusalem on Wednesday, following a preparatory round two weeks ago in Washington.
The prisoner release is part of an agreement to restart the talks after a five-year freeze.
The 26 inmates are the first of a total of 104 that Israel has promised to free within a year as part of a deal secured after months of shuttle diplomacy by US Secretary of State John Kerry, who has visited the region six times since March.
But Palestinian rights groups say that, upon close inspection, the deal is not the concession the Israelis are touting it to be.
Most of the detainees slated to be released on Tuesday have already served 20 years behind bars.
A small gathering of Israelis demonstrated outside the prison during the release. The protesters included family members of Israeli prisoners calling for the release of their relatives rather than the Palestinian inmates.
Meanwhile on Tuesday, Kerry called the Israeli prime minister to discuss settlement approvals Israel had announced earlier in the day. Palestinian officials have said that these announcements "threatened" talks with Israel.
Israel approved more than 900 new illegal settlement units near the Palestinian town of Beit Jala in occupied East Jerusalem, in addition to 1,200 settlement homes approved two days ago.
About 500,000 Jews live in more than 100 settlements built since Israel\’s 1967 occupation of the West Bank and East Jerusalem. The Palestinians want to establish their state in those areas, as well as the Gaza Strip.