Israel on Monday named 26 Palestinian prisoners to be freed this week under a deal enabling US-backed peace talks to resume, although Palestinians said these had been undermined by newly announced plans to expand Israeli settlements.

Some Israelis reacted angrily to the scheduled release on Tuesday or Wednesday of the long-term Palestinian prisoners.

"Shame on the government and shame on the prime minister and his supporters," Zvia Dahan, whose father, Moshe Becker, was killed while tending his orange grove in Israel in 1994, wrote on Facebook. One of Becker's three killers is to be freed.

The 26 prisoners are the first of a total of 104 Israel has decided in principle to free as part of an agreement reached after intensive shuttle diplomacy by US Secretary of State John Kerry to renew talks for Palestinian statehood.

Israel sweetened the deal for far-right members of its governing coalition on Sunday by announcing plans to build 1,187 new dwellings for Jewish settlers in the occupied West Bank and parts of the territory it annexed to Jerusalem after the 1967 Middle East war.

"Those who do these things are determined to undermine the peace negotiations, are determined to force people like us to leave the negotiating table," Palestinian chief negotiator Saeb Erekat told Reuters.

Commenting on the latest projects, a spokesman for European Union foreign policy chief Catherine Ashton said: "Israeli settlements in the West Bank are illegal under international law and threaten to make a two-state solution to the Israeli-Palestinian conflict impossible."

Mark Regev, a spokesman for Prime Minister Benjamin Netanyahu, said the new construction would take place in areas Israel intends to keep in any peace agreement. "This in no way changes the final map of peace. It changes nothing," he said.

Some 500,000 Israeli settlers live in the West Bank and East Jerusalem amid 2.5 million Palestinians. Israel withdrew in 2005 from the Gaza Strip, which is now governed by Hamas Islamists opposed to permanent co-existence with the Jewish state.

LOW EXPECTATIONS

Peace talks halted three years ago in a row over settlement building. They resumed in Washington on July 30, with a second round due in Jerusalem on Wednesday and later in the West Bank.

Few expect the latest negotiations to resolve issues that have defied solution for decades, such as borders, settlements, Jerusalem and Palestinian refugees.

Washington, which pressed Palestinian President Mahmoud Abbas to return to the table, wants a deal within nine months.

With neighbouring Egypt and Syria in upheaval and with Israel facing the threat of a nuclear Iran, Netanyahu decided he could ill afford to alienate the United States and led his pro-settlement government into the talks.

The decision to free the 26 prisoners, regarded as heroes by Palestinians and jailed as murderers by Israel between 1985 and 1994, was made late on Sunday.

A list of the prisoners, along with the names of the people they were convicted of killing, was published by Israel's Prisons Service as part of a process in which opponents of their release have 48 hours to appeal to the High Court. Based on past decisions, the court is widely expected not to intervene.

"I cannot believe (it), no matter what anyone tells me, until I hold my son's hand. When I touch him, then I can say my son has come home," said Emtawe El Khor, whose son Fayez has been in jail since 1985, convicted of murdering an Israeli.

Fourteen of those going free will be deported or sent to the Gaza Strip, and 12 to the West Bank. Two would have completed their terms in six months, and six over the next three years.

Israel has a number of times freed Palestinians before they served out their time, but mostly in swaps for Israeli soldiers or their remains held by the Jewish state's enemies.

For Abbas, who has vowed to seek freedom for all Palestinian prisoners, the prospective release is a boost after years of failed talks with Israel. Many of the inmates were said to have been linked to his Fatah movement or one of its allies. - Reuters