The release was the third of four tranches totaling 104 prisoners scheduled to take place over a period of months under the U.S.-brokered agreement.
The BBC reported the freed inmates were greeted by cheering crowds when they arrived home. Eight of them were driven to checkpoints leading into Gaza and East Jerusalem, while the other 18 were taken to Ramallah in the West Bank, the British network said.
The Palestinian prisoners had been convicted of crimes committed before the 1993 Oslo Accords, a set of agreements between the Israelis and Palestinians.
The Almagor terror victims association had unsuccessfully appealed to the High Court of Justice against their release, arguing the government reneged on a decision not to release "terrorists," Ynetnews.com reported.
Most of the prisoners were convicted of murdering Israeli civilians and soldiers. Others were convicted of killing Palestinians they suspected were collaborating with Israel.
"One of the things we knew when we captured these detainees is that they needed to stay in prison for the maximum period," Meir Indor of the victims' association told the Jerusalem Post.
"These men are time-bombs. Wherever they go they kill, because that's the purpose of their lives."
The Washington Post reported a few hundred people spent three days protesting in front of Netanyahu's official residence.
"The U.S. government would not release convicted murderers, so why is it pressuring Israel to release terrorists and murderers?" one of the protesters, Ben Ishai, said.
At a meeting of his Likud Party Monday, Prime Minister Benjamin Netanyahu defended the decision to free the inmates, the BBC said.
"Leadership is judged by the ability to implement decisions, difficult as they may be," he said. "We were not elected to make easy decisions."
The Washington Post said Palestinian Authority President Mahmoud Abbas was to welcome the prisoners and Palestinian Prisoner Affairs Minister Issa Karak said the freed men would "participate in a special torch-lighting to celebrate the beginning of the new year."
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