The prisoners received a hero's welcome upon their return to the West Bank yesterday, where thousands of people joined a celebration rally at the headquarters of Palestinian President Mahmoud Abbas.

"We will not rest until the prisoners are freed and the jails are empty," Mr Abbas told the cheering crowd.

The prisoners arrived in Ramallah after being released at an Israeli military checkpoint near Jerusalem. The prisoners, some waving black-and-white chequered keffiyeh head-dresses as they stepped off Israeli buses, kissed the ground before boarding Palestinian vehicles.

Among the 198 Palestinians freed was Said al-Atba, who served more than 30 years of a life sentence for masterminding a 1977 market bombing that killed one woman and wounded dozens others in Israel. Al-Atba, 57, was the longest serving inmate held by Israel and his release is symbolic for Palestinians.

His brother, Hisham, came from Saudi Arabia, where he works, to greet him. "I feel great, great joy," he said. "We had lost hope that my brother would be released because he's been in prison for 32 years."

Al-Atba's sister, Raida, said she had prepared her brother's favourite food, stuffed vine leaves and zucchini.

Israel said the release was a gesture meant to bolster Mr Abbas and give a boost to the slow-moving peace talks with his Western-leaning government.

"It's not easy for Israel to release prisoners. Some of the individuals being released today are guilty of direct involvement in the murder of innocent civilians," government spokesman Mark Regev said.

"But we understand the importance of the prisoner issue for Palestinian society...We believe this action can support the negotiation process and create goodwill."

The fate of the roughly 9,000 Palestinians in Israeli jails is highly emotional, since many Palestinians either know someone in prison or have served time themselves. Mr Abbas, who is struggling to show his people the fruits of the peace talks, has repeatedly urged Israel to carry out a large-scale release.

In his speech, Mr Abbas called for the freedom of all prisoners held by Israel. He mentioned Marwan Barghouti, a West Bank leader of Abbas' Fatah movement, who is serving five consecutive life terms in an Israeli prison. Barghouti is widely seen as a future Palestinian president.

He also singled out Ahmed Saadat, jailed leader of small radical faction suspected in the 2001 assassination of an Israeli Cabinet minister, and the imprisoned Palestinian parliament speaker Aziz Duaik of Fatah's rival, the radical Islamic Hamas movement.

"He is our brother and we must struggle to free all prisoners," Mr Abbas said.

In the presidential compound at Ramallah hung a giant poster with pictures of Mr Abbas, al-Atba and another veteran prisoner being freed, Mohammed Abu Ali, a politician from Abbas' Fatah party.

He was jailed in 1980 for killing an Israeli settler in the West Bank and later convicted of killing a Palestinian in jail he accused of collaborating with Israel.

Also among those freed were a 16-year-old girl who had been jailed for trying to stab an Israeli soldier.

Israel says the latest release is meant to show the Palestinians that dialogue, not violence, is the best way to win concessions.

Hamas is demanding the release of hundreds of prisoners in exchange for an Israeli soldier captured by Palestinian militants in a raid two years ago. The soldier is being held in the Hamas-controlled Gaza Strip.

The prisoner release came hours before the arrival of Ms Rice, who has been mediating the negotiations between Israel and Abbas' government. The talks had aimed for an agreement by the end of the year.