Tears streamed down Hosni Sawalha's face as he recited from the Koran alongside the graves of his parents, who died while he was in Israeli jail since his teens.

The 40-year-old and his cousin Mohammed Sawalha were released alongside 24 other long-serving Palestinian inmates early on Wednesday, hours before a new round of peace talks with Israel.

Palestinian president Mahmoud Abbas has asked caretaker prime minister Rami Hamdallah to stay on, tasking him on Tuesday with forming a new government, a spokesman said.

"Abbas on Tuesday met head of the caretaker government Rami Hamdallah and tasked him again with forming a government," the Palestinians' Wafa news agency quoted Abbas spokesman Nabil Abu Rudeina as saying.

Middle East peace talks could "collapse" due to continuing Israeli settlement expansion, a senior Palestinian official warned Tuesday, on the eve of the scheduled resumption of the fragile process.

"Settlement expansion goes against the U.S. administration's pledges and threatens to cause the negotiations' collapse," Yasser Abed Rabbo told Agence France Presse.

Gaza Strip rulers Hamas on Monday said peace talks with Israel were "futile," repeating its rejection of negotiations that are due to resume between Palestinians and Israelis this week.

"We renew our rejection of these futile talks, and consider them purely a means for the occupation (Israel) to look good to the international community," senior Hamas official Mahmoud al-Zahar told a news conference in Gaza.

The United States said Monday it had expressed "serious concerns" over Israel's decision to allow settlers to continue building on Palestinian land despite new peace talks.

Israel plans to issue tenders for 1,000 new housing units in east Jerusalem and the occupied West Bank, in the face of anger from Palestinian negotiators.

Israel's Prime Minister Benjamin Netanyahu on Monday slammed the EU's stance on Jewish settlements in the West Bank, saying they would hamper peace talks with the Palestinians.

His criticism came after Israel approved the construction of more than 1,000 new settlement units, in a move which infuriated Palestinians ahead of Wednesday's resumption of peace negotiations.

Israel will release 26 veteran Palestinian prisoners ahead of renewed peace talks set for later this week, an official statement said late Sunday.

Following the government decision the Israel Prisons Service published the names of the 26 selected to be freed ahead of the talks.

Israel said Sunday it would issue tenders for 1,000 new settlements in the West Bank and east Jerusalem and Palestinians called this proof Israel is "not serious" about peace talks.

"Tenders will be published" later in the day for 793 units to be built in annexed east Jerusalem and 394 elsewhere in the West Bank, the housing ministry said in a statement, three days ahead of a new round of Palestinian-Israeli negotiations.

Palestinian and Israeli negotiators will resume talks on ending their long-standing conflict on August 14 in Jerusalem, the U.S. State Department said Thursday.

The talks restarted last month in Washington under U.S. mediation, and both sides agreed to try to resolve their differences within nine months.

Progressive Socialist Party leader MP Walid Jumblat noted on Monday that years ago Hizbullah chief Sayyed Hassan Nasrallah has sought to liberate all of Lebanese occupied territory, but the party is now seeking to liberate the whole of Palestine from Israeli occupation.

He said in response to Nasrallah's recent speech: “Let the Palestinians decide their fate themselves.”