Medics from Magen David Adom emergency medical service said in coordination with the Israeli army and the health ministries of both sides, Israel would hand over the bodies of the 15 Palestinians at the Erez border crossing in Gaza on Monday.
The move comes in addition to a decision taken on Sunday by the Israeli cabinet to release 500 Palestinians prisoners in a bid to bolster newly elected Palestinian President Mahmud Abbas.
Israeli security sources said the bodies were those of Palestinian fighters killed in fighting with Israel, but the army would not comment nor identify the bodies.
Abbas and Israeli Prime Minister Ariel Sharon announced a ceasefire at an 8 February summit in Egypt, and Palestinian resistance groups have agreed to observe a de facto truce while they consider the ceasefire agreement.
Tel Aviv has also pledged a series of goodwill gestures to the Palestinians including a prisoner release, allowing labourers
from Gaza to enter Israel for the first time in months and to allow Palestinian fighters exiled to Europe to return to the occupied territories.