JERUSALEM, July 8 (Reuters) - Israeli Prime Minister Ehud Olmert's cabinet was set on Sunday to approve the release of 250 Palestinian prisoners in the latest of a series of bids to strengthen Western-backed Palestinian President Mahmoud Abbas. Olmert had pledged to free prisoners of Abbas's Fatah movement in a June 25 summit with the Palestinian leader as part of a Western campaign to bolster the new administration he named after sacking a unity government with Hamas Islamists. Miri Eisin, a spokeswoman for Olmert, said ministers meeting for a weekly session would likely approve the motion to free the prisoners. "We've already been working on the 250 names," but the list isn't final, Eisin said. "The cabinet has to approve the criteria, then a committee will work on the names." Once a roster is approved, it could still take days before any prisoners are freed since Israel would allow 48 hours for the releases to be challenged in petitions to the country's high court, she said. Eisin said the cabinet would also consider including prisoners with "blood on their hands" among those being freed, in a departure from Olmert's original pledge to avoid releasing Palestinians jailed for wounding or killing Israelis. "It is going to come up in the (cabinet) discussion," Eisin said. The United States and European Union have been prodding Olmert to nurture contacts with Abbas's emergency government in the hope it can lead to a resumption of contacts towards resuming long-stalled peace talks. In a goodwill gesture last week, Israel released Palestinian tax funds it had frozen a year ago when Hamas rose to power, a move that helped enable Abbas to pay Palestinian civil servants full salaries for the first time in 17 months. Hamas, which has rejected Western demands to recognise Israel, renounce violence and accept existing Israeli-Palestinian interim peace accords took over the Gaza Strip last month after routing Fatah in factional fighting.