Abu Obeida, spokesman of Hamas armed wing Izedin al-Qassam Brigades, said in Gaza, "I'm here to announce that the prisoner swap deal has been finalized after the male and female prisoners were freed from the prisons of the Israeli occupation."

The 550 prisoners were taken by buses heading for Palestinian territories. 509 of the prisoners are from the West Bank under the rule of the Palestinian National Authority (PNA), while 41 are from the Gaza Strip governed by Hamas.

Relatives and friends of the prisoners, as well as PNA officials and other factions' representatives gathered at President Mahmoud Abbas' headquarters in the West Bank city of Ramallah, while dozens other people gathered at the crossing point between Gaza and Israel to greet the prisoners.

The 550 prisoners are set free in line with the second and last phase of the swap deal. The first batch of 477 prisoners, most of whom were Hamas militants and leaders, were released on October 18.

According to the Egypt-brokered agreement, Hamas freed the Israeli soldier Gilad Shalit abducted in a cross-border raid in June 2006 for the return of 1,027 Palestinian prisoners. Shalit was released during the first phase of the deal.

None of the 550 prisoners released Sunday are members of Hamas or Islamic Jihad. Instead, most of them are members of Abbas' Fatah party and other factions of Palestine Liberation Organization and have not been involved in direct killing of Israelis.