Israel freed 26 Palestinian prisoners on Tuesday night ahead of U.S. sponsored Mideast peace talks but diplomacy remained dogged by Israeli plans for more settlers’ homes. 
The 26 men released were the first batch of 104 Palestinians serving long jail terms, many for deadly attacks on Israelis, according to Reuters.
They have now won amnesty in a move that may improve Palestinian President Mahmoud Abbas’s domestic standing, despite him having dropped demands to condition peace talks on a halt to settlement building, Reuters said.Abbas came under fire not just from the rival Hamas Islamists who control Gaza but from within his own administration.“The extremist Israeli government continues to exploit the negotiations as cover for settlements,” said Qais Abdul Kareem , a senior member of Abbas’s Palestine Liberation Organization, in a statement denouncing the prisoner release as a poor trade-off.
The prisoners entered Gaza and West Bank where they were received with celebrations by fellow Palestinians.
Israelis and Palestinians will resume peace negotiations in Jerusalem  on Wednesday after a five-year freeze.
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 U.S. Secretary of State John Kerry, according to Reuters.
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, Reuters reported.
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 104 that Israel has agreed to free in four stages.
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.
Neighboring Egypt and Syria are in upheaval and Israel remains deeply concerned Iran is seeking to build a nuclear bomb, something Tehran denies . Israel is widely believed to be the only power in the Middle East with nuclear weapons.