The former prisoners traveled to the West Bank city of Ramallah after their release from Ketziot prison in Israel's Negev Desert. Many kissed the ground when they arrived in Ramallah to a welcome by Palestinian President Mahmoud Abbas.
Mr. Abbas called Friday's release a beginning, saying he will work to get more prisoners released. The Palestinian President says he hopes for the release of all prisoners Israel holds.
Thousands of family members and Fatah loyalists greeted the men who celebrated their release by praying at the grave of Yasser Arafat, the Palestinian leader who died in 2004.
Nearly all of those released today belong to President Abbas' Fatah movement. Israeli officials say all had at least one year left on their sentence. One of the most prominent was Abdel Rahim Malouh a leader of the Popular Front for the Liberation of Palestine. The group assassinated an Israeli cabinet member six years ago.
Israel still holds about ten-thousand Palestinian prisoners. Miri Eisin, a spokeswoman for Israeli Prime Minister Ehud Olmert, says releasing prisoners Israel considers terrorists was not easy, but Israel wants to show support for President Abbas, who last month dismissed the Hamas-led Palestinian unity government and named a new moderate cabinet that Israel says it can work with.
"I want to emphasize these are convicted terrorists. These are not easy people for Israel let out. They participated in acts of terror. The reason we are letting them out is to show a gesture of goodwill to try and strengthen those forces in the Palestinian Authority who state clearly they want to reach the Palestinian state through dialogue and not through terror."
The prisoner release came one day after the central council of the Palestine Liberation Organization endorsed a call by Mr. Abbas for early elections. Hamas leaders strongly condemned the move. Last month Hamas militants seized power in the Gaza Strip effectively splitting the Palestinian territories in two.