JERUSALEM: Israel on Wednesday announced new construction in east Jerusalem — an area the Palestinians demand for their future state — just hours after it freed 26 Palestinian prisoners as part of a deal to set in motion US-backed peace talks.

The building is seen as an attempt by Prime Minister Benjamin Netanyahu to make up for the prisoner release, for which he has been sharply criticized at home. The prisoners were jailed for attacks on Israelis.

Interior Ministry spokeswoman Lital Apter said on Wednesday that four projects are being promoted, including 1,500 housing units in Ramat Shlomo in east Jerusalem.

The announcement was timed to trump headlines focusing on the celebrations in the West Bank and Gaza after the 26 prisoners walked free into their respective home territories shortly after 1:00 am.

In the West Bank, thousands of people turned out to welcome home the 26 prisoners at a formal ceremony at President Mahmud Abbas's presidential compound in Ramallah, cheering and waving flags, many holding cellphones aloft to capture the moment.

The sequence of events was almost a mirror image of an earlier prisoner release on August 13, when a first tranche of 26 prisoners were freed and Israel announced construction of more than 2,000 new settler homes, most of them in east Jerusalem.

Israel's move to ramp up settlement in tandem with the prisoner release was mooted last week by a senior Israeli official who said the expected announcement on new construction had been coordinated in advance with the Palestinians and the Americans.

Palestinian President Abbas however, speaking shortly before the Israeli announcement, flatly denied it.

“There are some living among us who say that we have a deal (to release prisoners) in exchange for settlement building, and I say to them, be silent,” said the Palestinian president

The release of 26 Palestinians after midnight Tuesday was the second of four prisoner releases meant to restart Israeli-Palestinian talks in an effort to reach a final agreement between the two sides.

The Palestinians had long refused to resume peace negotiations with Israel unless it ends construction in territories that Palestinians seek for their state. Israel refused, insisting that settlements and other core issues, including security, should be resolved through negotiations.

The prisoner release was part of an agreement brokered by US Secretary of State John Kerry, which brought Israel and the Palestinians back to the negotiating table after a five-year hiatus. The talks had been paralyzed since 2008.

Earlier this year, Kerry managed to persuade Palestinian President Mahmoud Abbas to drop the settlement issue as a condition for restarting negotiations. In exchange, Israel agreed to the prisoner release.

In all, 104 Palestinian convicts are to be released in four rounds over the coming months.

The Palestinian Authority said Wednesday that Israel's plans to build 1,500 new settler homes in occupied east Jerusalem was destroying the peace process.

The move “destroys the peace process and is a message to the international community that Israel is a country that does not respect international law,” Nabil Abu Rudeina, spokesman for Palestinian president Mahmud Abbas, said in a statement.

Thousands of Palestinians have been held in Israeli prisons since Israel's capture of the West Bank, Gaza and east Jerusalem in the 1967 Mideast war, many jailed on charges ranging from throwing rocks to killing civilians in bombings, shootings and other attacks.

The fate of the prisoners is a deeply emotional issue in Palestinian society. After decades of fighting Israel, many families have had a member imprisoned and the release of prisoners has been a longstanding demand. Israelis mostly view them as terrorists because of the Palestinians grisly attacks on Israelis including civilians.

Among those freed Wednesday were prisoners jailed for the killings of Israelis, including a reservist and a Nazi death camp survivor, according to a list provided by Israel's prison service. Many of the killings occurred before the beginning of Israeli-Palestinian peace talks in 1993.