AL QUDS, Feb 13: Israel's cabinet on Sunday approved the release of 500 Palestinian prisoners in what Prime Minister Ariel Sharon called a goodwill gesture to bolster new Palestinian leader Mahmoud Abbas and build mutual trust.

In a further step to support peace moves after Sharon and Abbas agreed on a cease fire at a groundbreaking summit five days ago, Israel let more than 200 Palestinian labourers enter from the Gaza Strip for the first time in months.

Mr Abbas won a pledge from Palestinian militants on Saturday to keep a de facto truce while they weigh the cease fire. In a major policy shift, the Hamas and Islamic Jihad groups said they would not retaliate immediately for any Israeli military action.

Government officials said the 500 prisoners could go free as early as Tuesday. Another 400 are due to be released in the next few weeks under a decision announced by Sharon last week. -Reuters