At the Tarkumiya checkpoint near Hebron, family members waited for their loved ones alongside a replica of the Dome of the Rock mosque.
Earlier on Thursday the prisoners boarded buses at a prison in southern Israel on their way to freedom, the last phase of an Israeli pledge to release 900 prisoners as part of a ceasefire deal.
As the prisoners got off the buses, some began kissing the ground on their release.
The men then boarded Palestinian buses, which took them about 100 metres to their cheering relatives. Young girls threw candy on the prisoners as they were reunited with their families.
Prisoners herded into cars at the Erez crossing were cheered by crowds as drivers honked and waved Palestinian flags out of windows.
The jailed Palestinians were
reunited with their families
The prisoners were taken to five crossing points in the West Bank and Gaza Strip to be released.
Sami Abu Nahal, 42, from the Beach refugee camp in Gaza, said he was looking forward to meeting his four-year-old daughter for the first time, but still had mixed feelings about his release.
"I can smell the freedom. I am happy to see my daughter, Wala," said Abu Nahal, who spent four years in prison. "But at the same time I'm feeling sad because I left friends and brothers inside the Israeli jails."
In the West Bank town of Nablus, thousands of people celebrated the release, including dozens of masked men who fired guns into the air. Some 85 of the prisoners freed on Thursday were from the Nablus area.
"I think it's making 400 Palestinian families happy today and I hope that we can also make happy the other 8000 families who are concerned about their loved ones"
The fate of the prisoners held by Israel is emotional for Palestinians, and Abbas has tried to make their release a priority.
With an estimated 8000 Palestinians in Israeli prisons, most Palestinian families have friends or relatives behind bars.
Saeb Erekat, a senior Palestinian official, welcomed Thursday's release, but said Israel must go further.
"I think it's making 400 Palestinian families happy today and I hope that we can also make happy the other 8000 families who are concerned about their loved ones," Erekat said.
Musa Kuran, a prisoner freed in Tulkarim on Thursday, said he is optimistic that Abbas will free the rest of his comrades.
"Life was very hard in prison. I'm sad that my friends are still inside. But I trust Abu Mazen will free them, the way he freed me. He's smart enough to get them out," Kuran said.
Israeli officials said none of the
prisoners were involved in attacks
In the past, Israel has refused to release prisoners who have not served two-thirds of their terms, but on Wednesday 93 of the detainees had only completed a fraction of their sentences.
But sources at the Palestinian Prisoners Committee and the Red Cross Committee said most of the released were prisoners whose sentences were due to end or had already ended.
Some of the prisoners released were charged with attempted shootings, preparing explosives and assisting attempted murder.
But Israel has said none of the 400 "have blood on their hands" or were detained for being involved in anti-Israeli attacks.
Islamic Jihad stated that none of the movement's prisoners were released.
Israel pledged at a summit in February at the Egyptian Red Sea resort of Sharm el-Sheik to release 900 prisoners.
Immediately after the regional summit, about 500 prisoners were freed.