Israel was set to free 26 Palestinian prisoners within hours to help underpin renewed peace talks, after its High Court on Tuesday rejected an appeal against their release.
Authorities planned to transport the group from jail in the dead of night in the early hours of Wednesday. The men, arrested between 1985 and 2001, were to return to homes in the occupied West Bank and the Gaza Strip.
An Israeli official said they would be taken in vehicles with sealed windows to prevent a repetition of scenes in which released Palestinian prisoners have stretched out their hands in V-for-Victory signs.
Disdain for the prisoners is strong in Israel, whose media have featured detailed accounts of their attacks on Israelis since a release roster was published two days ago. Palestinians regard the men as heroes in a struggle for statehood.
The three-justice High Court panel ruled the government had been within its purview to free them, although Chief Justice Asher Grunis wrote in the decision that "our hearts are with the families, who are victims of terror".
Hours after the release, US-brokered peace talks with the Palestinians, which opened in Washington on July 30, were due to resume in Jerusalem, with further negotiations expected later in the occupied West Bank.
The talks broke down three years ago in a dispute over settlement building in territory Palestinians seek for a state.
Israel's announcement on Sunday of plans to expand settlements drew Palestinian anger but no formal threat to withdraw from negotiations, whose resumption was driven by intensive shuttle diplomacy by US Secretary of State John Kerry.
The United States is seeking to broker a "two-state solution" in which Israel would exist peacefully alongside a Palestinian state created in the West Bank and the Gaza Strip, lands captured in the 1967 Middle East war.
The United States, European Union and United Nations on Monday condemned Israel's announcement of construction plans for about 2,000 new settler homes.
Most world powers regard all the settlements as illegal. During a visit to Colombia, Kerry called on the Palestinians "not to react adversely" to Israel's latest plans.
Israel dismissed such criticism, saying the settlement plans were intended for West Bank areas it wanted to keep under any peace deal with the Palestinians.
The 26 prisoners due to be released were among a total of 104 that Israel has agreed to free in four stages.
"I think this is an important accomplishment, one that gives hope to the Palestinian people," Palestinian Minister of Prisoners Issa Qaraqe told Reuters.
Palestinian President Mahmoud Abbas's Islamist rival, Hamas, had limited praise for the prisoner release, although it also reiterated its objections to negotiating with Israel, whose existence it rejects.
Some 500,000 Israeli settlers live in the West Bank and East Jerusalem amid 2.5 million Palestinians. Israel withdrew in 2005 from the Gaza Strip, now governed by Hamas Islamists.
Few expect the latest negotiations to resolve issues that have defied solution for decades, such as borders, settlements, Jerusalem and Palestinian refugees. The United States has said it seeks a peace deal within nine months.
Netanyahu appears to have decided he can ill afford to alienate the United States at the moment given the turmoil in the region, and led his pro-settlement government into talks.