The cabinet approved the release of some 400 Palestinian prisoners yesterday as a gesture of goodwill toward Palestinian Authority Chairman Mahmoud Abbas, in accordance with previous agreements.

The cabinet approved the move by an 18-3 majority, with Finance Minister Benjamin Netanyahu, Health Minister Dan Naveh and Agriculture Minister Yisrael Katz opposing the move.

Prime Minister Ariel Sharon told ministers at the opening of the weekly cabinet meeting that the release would bolster the moderate Palestinian leadership ahead of the upcoming elections.

"Israel has reproaches, even serious ones, about the implementation of the Sharm el-Sheikh agreements," Sharon said.

"But more than others, those who believe that the coming month's events could strengthen the hands of radical terror forces, surely understand the need to strengthen moderate parts in the Palestinian Authority and to abide by our commitments," Sharon said.

But Netanyahu said the move would only encourage terrorists that view the release as a victory.

"I think the Palestinian committed themselves to act against terrorism and terror groups, and I think they have failed in both tasks," he said. "I therefore see no reason, while Israel Defense Forces Chief of Staff [Moshe] Ya'alon and others are warning of the strengthening of Hamas and the PA's helplessness, I see no reason to give them a prize," he said.

This is the second stage of Israel's undertaking to release 900 prisoners, made at the Sharm el-Sheikh talks in February.

None of the prisoners to be freed has "blood on his hands," meaning none has participated in the murder of Israelis. However, Israel lifted an earlier requirement to release only those who have served more than two-thirds of their sentence in order to fill the quota of 400 releases.

The prisoners slated for release include activists in Islamic organizations, although most of them are members of the Fatah movement.

Palestinians immediately criticized the decision, saying Israel had broken its agreement to consult them on which prisoners to release.

The Palestinians demanded the release of 360 prisoners who have been in jail for more than a decade, but Israel refused to free prisoners who had been involved in violence, said Issa Karake, a member of a Palestinian committee that was to have negotiated the release with Israel.

Palestinian Minister Saeb Erekat said he asked Israel to resume handing over West Bank cities to Palestinian control immediately, as it also had pledged to do as part of the February truce deal.

The list of prisoners was drawn up by a committee headed by Justice Ministry director general Aharon Abramovitz, consisting of representatives of the police, Prison Services, the IDF and Shin Bet secret service.

The IDF has recently recommended speeding up the prisoner release, explaining that Abbas needs an Israeli gesture to prove to the Palestinians that stopping terror will yield benefits.

Senior officers recommended adding veteran prisoners who were involved in terrorist attacks to the list of released prisoners. The officers said Israel could release a number of Fatah activists with "blood on their hands" if they had been arrested before the 1993 Oslo agreements and if they had served a considerable part of their sentence.

The Shin Bet, however, vehemently objected, and ultimately its position prevailed. Barring last-minute changes, the 400 prisoners will be released at the end of this week. Past prisoners' releases have been delayed due to objections by some ministers and petitions to the High Court of Justice.