Israel frees prisoners, OKs new settlements before new peace talks August 13, 2013 -- Updated 1915 GMT (0315 HKT) NEW: Prisoner release under way in Israel (CNN) -- Israel began releasing more than two dozen Palestinian prisoners late Tuesday, a gesture on the eve of new peace talks that have been complicated by plans for new Israeli housing in East Jerusalem. Israeli officials approved the release of 26 Palestinian prisoners ahead of the Wednesday talks. But a committee of Israeli Cabinet ministers stressed "that if any of the released prisoners return to hostile activity against the state of Israel, they will be returned to continue serving their sentences." The move came after Israel said it would forge ahead with a plan to build 900 housing units in East Jerusalem, which the Palestinians hope will be the capital of their future state. "Based on that plan, the neighborhood will expand towards Beit Jala," the Israel Broadcasting Authority said. But critics within Israel, which claims all of Jerusalem as its capital, say construction on disputed territory could derail a fragile new round of negotiations.