The cabinet did not say when the prisoners would be freed or who would be on the list.
The process of releasing 100-200 Palestinian prisoners comes as part of the deal in which Israeli Azzam Azzam was released from an Egyptian prison last week.
The prisoner release is expected to take place next week after the completion of all necessary bureaucratic preparations.
Israeli concessions before the vote are seen as boosting the chances of Mohammed Abbas, a former prime minister seen as a moderate, amid hopes that Arafat's death could revive chances for a Middle East peace settlement.
The government was expected to authorize the creation of a special cabinet committee for the release of the prisoners. The committee will be headed by Prime Minister Ariel Sharon and will be comprised of Defense Minister Shaul Mofaz, Foreign Minister Silvan Shalom, Justice Minister Tzipi Livni, and Public Security Minister Gideon Ezra.
The panel will receive a preparatory report on the prisoners written by Justice Ministry's Director-General Aharon Abramovitz, after which it will confirm the release.
Government officials said Saturday that the criteria for releasing the prisoners will be based on cabinet decisions made in July 2003, and will not include those with "blood on their hands," either by participating in killing Israelis or dispatching others to do so. Those who do not qualify for release include bomb makers.
Palestinians demand the release of all 6,000 detainees arrested in Israeli sweeps for suspected militants during a four-year-old uprising. Some are being held without trial.
The Israel Defense Forces and security services also are busy with preparations to facilitate elections in the Palestinian Authority scheduled for January 9. Efforts are concentrating on repositioning IDF troops and roadblocks throughout the territories, thereby easing the movement of Palestinian voters.
Ariel Scharon
'''Tel Aviv (Israel), 12.12.2004''' - Das israelische Kabinett unter Premierminister Ariel Scharon hat der Freilassung von mehreren Dutzend palästinensischen Gefangenen zugestimmt. Dieser Beschluss ist Teil eines Prozesses vertrauensbildender Maßnahmen, in denen auch der Israeli Azzam aus einem Gefängnis in Ägypten entlassen wurde.