Israeli political sources said on Sunday that under the weekend deal a joint committee will be set up with the Palestinians to discuss the release roster after Tuesday's meeting between Israeli Prime Minister Ariel Sharon and Palestinian President Mahmud Abbas.
Palestinian officials, who had warned that the dispute could cause a crisis at a summit seen as crucial to ending four years of violence, confirmed the account.
"This was a positive step forward," one Palestinian official said. The prisoner issue could loom large in meetings new US Secretary of State Condoleezza Rice is to hold with Sharon and Abbas before the summit. She is to arrive in Jerusalem on Sunday.
Israel had disappointed the Palestinian leadership by refusing to include those jailed for deadly attacks among the 900 prisoners whom Sharon and top cabinet ministers intend to release in a goodwill gesture.
Abbas is under enormous domestic pressure to secure freedom for 8000 prisoners, among the most emotive issues for ordinary Palestinians, many of whom have relatives in Israeli jails and see their release as a sign of peace and goodwill.
A group of 500 detainees is to be
freed after the summit
The issue is also key to Abbas' aim of consolidating power, ending bloodshed and reviving the road map charting mutual steps to Palestinian statehood.
Sharon will meet Abbas for the first time since the Palestinian leader was elected on 9 January to replace Yasir Arafat, seen by Israel and the United States as an obstacle for peace.
The talks, hosted in the Red Sea resort of Sharm al-Shaikh by Egyptian President Husni Mubarak and joined by Jordan's King Abd Allah, would aim to consolidate a shaky de facto ceasefire that Abbas has coaxed from Palestinian resistance groups.
A first group of 500 prisoners is expected to be freed after the summit, with 400 to follow over about three months. Israel's plan also calls for a troop pullback from five West Bank cities, starting in Jericho next week, after the talks.