Palestinian President Mahmoud Abbas has led a ceremony to honour Palestinians killed carrying out attacks against Israel as far back as 1975.
Israel repatriated 91 bodies on Wednesday as part of a deal to end a mass hunger strike by hundreds of Palestinian prisoners in Israeli jails.
The coffins were handed over at dawn. Each was draped in a Palestinian flag.
Seventy-nine were transferred to Ramallah, where the Palestinian Authority has its headquarters. The other 12 were taken to Gaza, which is run by Hamas.
The BBC reports the dead are considered martyrs by Palestinians, but terrorists by Israelis
Israeli officials say the transfer was a confidence-building gesture.
However, Mr Abbas has given no indication that he is willing to return to talks.
