Israel has agreed to release 26 long-serving Palestinian prisoners as part of a US-brokered deal that led to the resumption of Mideast peace talks.
Sunday's Cabinet vote set into motion the second leg of prisoner releases agreed upon before Israel and the Palestinians renewed long-frozen peace negotiations in August.
At the same time, Prime Minister Benjamin Netanyahu is planning on approving new settlement construction to appease hard-liners who oppose the release.
The fate of Palestinian prisoners stirs strong emotions on both sides, highlighting the competing narratives of the conflict.
Many of those to be freed were involved in killing Israelis.
Most Palestinians view the prisoners as heroes, regardless of their acts, arguing they made personal sacrifices in the struggle for independence. Most Israelis view them as terrorists for targeting civilians.