The claim comes a day after Israel agreed to a troop pullback from West Bank cities and a plan to release some Palestinian prisoners, steps crucial to the success of a summit with the Palestinians next week.
Thursday evening's talks between Palestinian Cabinet Secretary Hasan Abu Libdah and Israeli Prime Minister Ariel Sharon's bureau chief Dov Weisglass failed to achieve agreement on the prisoner issue, Aljazeera learned.
Palestinians expressed disappointment on Friday at Israel's stance on not releasing all 900 jailed Palestinian activists and accused Israel of dictating the offer to them, rather than discussing it.
Voice of Palestine Radio quoted Abu Libdah as saying Israel's criteria for releasing the prisoners was "not what we had hoped for".
Points of difference
Speaking to Aljazeera from Ram Allah, Palestinian under-secretary of prisoners affairs Radi al-Jaraayi said there were two points of difference with Israel – the names and number of Palestinian prisoners to be freed.
Palestinians insist Israel must
release all prisoners
Israel says it will choose the prisoners to be freed according to its own criteria and will retain in its jails those involved in killing Jews, the official pointed out.
"We do not agree with this as Israel has also killed thousands of innocent Palestinians," al-Jaraayi said.
"We call Israel to free all prisoners and close this issue once and for all," he said.
"The Israeli authorities have also rejected our plea to release 300 Palestinian children in the age group 14 to 18 under international humanitarian law.
"We call Israel to free all prisoners and close this issue once and for all"
Palestinian under-secretary of
"There are also some prisoners suffering from serious illnesses like cancer, thrombus and heart problems, but Israel is refusing to free them," al-Jaraayi said.
There are 18 pregnant Palestinian women in Israeli prisons, some of whom have delivered in their jails. They too need to be released, he said.
Israel Radio reported that the Palestinians want the list of prisoners to include 237 Palestinians who have been jailed since before the 1993 Israeli-Palestinian interim Oslo agreements, but Israel refused.
The radio said that 233 of the 237 were "murderers" - involved in planning or executing attacks in which Israelis were killed.
Israel's cabinet, consisting of six key ministers, has given its green light for an army withdrawal from five West Bank cities and their transfer to Palestinian security services.
It has also approved releasing 900 Palestinian prisoners "with no blood on their hands" - with the first 500 to be set free soon after the Sharm al-Shaikh summit.
Middle East peace talks will be
held in Egypt's Sharm al-Shaikh
The decisions must be approved by the larger security cabinet, which also discussed several goodwill gestures on Friday morning, among them freezing search and arrest operations against wanted Palestinian militants - excluding those it describes as "ticking bombs".
Israeli and Palestinian leaders were expected to make a formal declaration of an end to violence at Tuesday's Middle East summit in the Egyptian resort of Sharm al-Shaikh.