Israel's Cabinet on Sunday approved the release of some 200 Palestinian prisoners as a goodwill gesture to the Palestinian government of moderate President Mahmoud Abbas.

Prime Minister Ehud Olmert's Cabinet passed the proposal 16-4. Earlier this month, Olmert told Abbas he would free some of the 9,000 Palestinians held by Israel to help energize peace talks.

The prisoner issue is extremely emotional for Palestinians, many of whom know somebody behind bars or have been imprisoned themselves. Palestinians see Israel's justice system as unfair and have elevated prisoners to hero status. Abbas, known as Abu Mazen, has repeatedly called for a large release to boost his public standing.

"This is a gesture to Abu Mazen and the Palestinian people for the upcoming month of Ramadan," the Muslim holy month, Olmert told the Cabinet, according to a meeting participant who spoke on condition of anonymity because the proceedings were closed. Ramadan begins Sept. 1.

In the West Bank, Palestinian Prime Minister Salam Fayyad welcomed the gesture, but said Israel should release even larger numbers of prisoners.

"We welcome the release of any Palestinian prisoner. It is considered a victory for Palestinians," he told The Associated Press during a tour of the northern village of Tubas. "We ask Israeli to change its conditions for releasing prisoners and we ask for the release of all prisoners without exception."

Israeli security officials must still approve the list of prisoners to be freed under Sunday's decision. But the Cabinet official said the release would likely include two Palestinians involved in deadly attacks on Israelis. The official said officials believe the two men, convicted in attacks that occurred in the late 1970s, were unlikely to return to violence.

Israel's official position is that Palestinians involved in fatal attacks cannot be freed. However, it has made exceptions, most recently last month when it released a Lebanese prisoner convicted of killing three Israelis as part of a swap with the Hezbollah guerrilla group.

The Israel Prisons Authority said Sunday that Israel is holding about 9,000 Palestinian prisoners.

Also Sunday, Palestinian militants fired a rocket at Israel, the military said. An Israel-Hamas truce that took effect June 19 is supposed to stop rocket attacks and Israeli reprisals. Hamas charged that the report of the rocket attack was falsified by Israel.

The Cabinet decision followed Olmert's announcement last month that he will leave office as he battles a corruption investigation. Palestinians have been seeking assurances that peace talks, started with great fanfare at a U.S.-sponsored conference last November, would continue despite Israel's political turmoil.

Olmert has said he is determined to press ahead with peace efforts as long as he is in office. His Kadima Party is scheduled to choose a new leader next month, but because of Israel's complicated political system, his term could extend into next year. Olmert and Abbas had hoped to reach a peace agreement by the end of the year, though both sides have scaled back those expectations.

Israeli officials also said Sunday's vote was meant to send a message that Abbas can make progress through peaceful means, in contrast to his opponents' efforts to use force and abductions against the Jewish state.

Abbas' rival, the Hamas militant group, is demanding the release of hundreds of Palestinian prisoners in exchange for a captured Israeli soldier held in the Gaza Strip for more than a year.

As Israel tries to negotiate a peace deal with Abbas, it has boycotted Hamas, which it considers a terrorist group. Hamas violently seized control of the Gaza Strip from Abbas' forces in June 2006.

In Gaza, Hamas spokesman Sami Abu Zuhri said the Israeli prisoner release aimed to widen internal Palestinian divisions between Hamas and Abbas' Fatah movement.