JERUSALEM - JERUSALEM - The Israeli Cabinet on Sunday approved the release of 250 Palestinian prisoners, officials said, in the government's latest gesture of support for moderate Palestinian President Mahmoud Abbas.

Palestinian students attend their graduation ceremony at Birzeit University near the West Bank city of Ramallah. [AFP]

However, the officials said Israel had still not finalized the list of prisoners to be freed or the timing of the release. Palestinian officials said they were disappointed Israel wasn't coordinating the release with them.

Prime Minister Ehud Olmert agreed to the prisoner release at a June 25 summit with Abbas as part of Israel's strategy of bolstering the Palestinian leader in his standoff against Hamas militants.

Israel also has transferred more than $100 million in frozen tax funds to Abbas, and pledged to ease travel restrictions on Palestinians in the West Bank.

"We want to use every means that can strengthen the moderates within the Palestinian Authority, to encourage them to take the path that we believe can create conditions for the start of meaningful discussions," Olmert said in a televised statement at the opening of the meeting.

Israel is holding some 10,000 Palestinian prisoners.

The prisoner release would be the first since February 2005, when Israel freed 500 in a similar move aimed at bolstering Abbas, who had just won election as Palestinian president.

Olmert said none of the prisoners "have blood on their hands" ¡ª Israeli terminology for people involved in deadly attacks. He said the release had been cleared with Cabinet ministers and security officials.

Participants in Sunday's Cabinet meeting said the planned release was approved by a wide margin.

The participants said Olmert wants the release to be more than symbolic. Israeli media said Olmert over the weekend had rejected a list dominated by people who were scheduled to be released soon and ordered a new list to be drawn up.

After the June 25 summit in Egypt, Israeli officials had pledged a quick release. But the move has been delayed because of wrangling with security officials over who should be freed.

Saeb Erekat, a top aide to Abbas, urged Israel to coordinate the release with the Palestinians. "We have not been consulted on this release," he said, adding that Israel has rejected calls to convene a joint committee of prisoners.

The Palestinians have urged Israel to release some of the most prominent prisoners, including Marwan Barghouti, a top official in Abbas' Fatah movement who is serving life sentences for involvement in five murders.

Israel has rejected calls for Barghouti's release, though Olmert has said the prisoners will come from Abbas' Fatah movement.

Riad Maliki, the information minister in Abbas' new government, said he expected the 250 prisoners to be former military men from pro-Fatah security forces. "If it was in our hands to chose ... we would have chosen a group that more fairly represented the body of Palestinian prisoners, from all political groups," Maliki said.

Israel is interested in strengthening Abbas, a moderate who favors peace talks, following Hamas' violent takeover of the Gaza Strip last month. The fighting in Gaza has left Palestinians with two rival governments ¡ª the isolated Hamas rulers in Gaza, and Abbas' Western-backed emergency government in the West Bank.

In Gaza, Hamas spokesman Sami Abu Zuhri said a release of Fatah prisoners signaled that Abbas is collaborating with Israel. "He should have refused any release unless it includes all Palestinian prisoners," he said.

Hamas has been demanding the release of hundreds of prisoners in exchange for an Israeli soldier it captured more than a year ago. Israel has a long history of lopsided prisoner exchanges to bring captured or fallen soldiers home.

Olmert said he is "convinced beyond doubt" that the upcoming release would not hurt the chances of returning the soldier, Cpl. Gilad Shalit, or bringing home two other soldiers captured by Hezbollah guerrillas a year ago. He said "maybe it will even create an atmosphere that will facilitate the process relating their release."