Israeli Prime Minister Ehud Olmert says Israel will have to withdraw from large parts of the occupied West Bank, but only after negotiations with the Palestinians.
During a visit Friday to an Israeli communal farm, Mr. Olmert said anyone who believes Israel can maintain its hold on all of the Palestinian territories is living in a dream.
But he said Israel will not make a unilateral move to withdraw. Mr. Olmert said instead, any steps would have to be negotiated with the government of Palestinian President Mahmoud Abbas.
Earlier this week, Israel freed 256 Palestinian prisoners in a show of support for President Abbas in his struggle with Hamas militants.
The detainees were released Friday from a prison in Israel's Negev Desert and taken by bus to the West Bank city of Ramallah.
Almost all of those freed are members of Mr. Abbas's Fatah party.
Thousands of family members and Fatah party members greeted the men, who celebrated their release by kissing the ground.
Mr. Abbas also welcomed the prisoners and said he will work to secure the release of all 10-thousand Palestinians detained by Israel.
An Israeli government spokeswoman, Miri Eisen, said it was not easy to release men convicted by Israel of terrorism. But she says Israel wants to strengthen Palestinian forces who want to establish a state through dialogue rather than violence.