Three Israeli Supreme Court judges have refused to block the release of 550 Palestinian prisoners, scheduled for Sunday.
It is the second phase of an agreement with the terrorist group Hamas that resulted in the return of kidnapped Israeli soldier Gilad Shalit.
Earlier this year, 477 Palestinians were freed when Shalit was returned to Israel from the Gaza Strip in mid-October after five years in captivity.
Israeli family members of people killed by the Palestinian prisoners had hoped the government would delay the release to study in-depth the crimes committed by the prisoners.
"One hundred and eighty Israelis already have been killed by terrorists who have been released. We think that the Israeli government shouldn't do the second step," Meir Endor, from the Israeli victims organization Almagor, warned.
But the high court took into consideration the prosecution's argument that only two of the 550 prisoners have blood on their hands, none of the inmates are reported to be members of Hamas or Islamic Jihad, and most have served two-thirds or more of their sentences.
One Palestinian mother was elated by the decision. Fahdi Amer, 27, is on the release list.
"I swear to God, I can't describe my feeling. It's the feeling of a mother whose son is included on this list," his mother, Khaula, said. "I hope all the prisoners will go back to their homes and their mothers."
But Ron Kehrmann, whose 17-year-old daughter Tal was killed in a 2003 suicide bombing, fears that other innocents will die as a result of the decision.
"Is the blood of the next captured soldier or citizen less red than the blood of Gilad Shalit?" he asked.
Palestinian officials are preparing a weekend hero's welcome for the prisoners.
Sources: YNet, AP, Fox News