During a speech to a pro-Israeli lobby group in Washington, Mr Sharon said he would cooperate with the Palestinian leadership, and pledged to seek cabinet approval for the prisoner release upon his return to Israel.
Israel has previously pledged to free 900 Palestinians but only 500 have been released so far.
The Palestinian leadership was dismissive of the promise.
“This comment is pure propaganda because he is in the United States,” Palestinian Planning Minister Ghassan Khatib said in Ramallah.
“Sharon was supposed to release 400 prisoners under the Sharm el-Sheikh agreements but he didn’t. We don’t believe what Sharon says, it is what he does on the ground that counts,” he said referring to an agreement at the landmark summit in Egypt on February 8.
In Washington the Israeli leader also reiterated his commitment to the withdrawal of Israeli settlers from the Gaza Strip, but insisted Israeli security must not be compromised.
He said with Palestinian cooperation, the withdrawal could be a springboard to full-fledged peace negotiations.
“The successful coordination of the disengagement plan will allow us to embark on a new era of trust,” he said and encouraged Palestinian leaders to “meet the challenge”.
But Mr Sharon reiterated his position that Israel will maintain control of major West Bank settlements under any future peace agreement.
The prime minister said he has paid a heavy political price for supporting peace with the Palestinians.
“We see great opportunities in the election of Chairman Abbas. We hope he will be able to lead his people and create a democratic, law-abiding society,” he said.
Mr Sharon’s comments came two days ahead of a White House meeting between US President George W Bush and Palestinian President Mahmoud Abbas.
Before leaving the West Bank, Mr Abbas expressed hope of achieving a diplomatic breakthrough with the American President.
“We need many replies to many questions and we hope that we receive positive replies,” Mr Abbas said.
“I hope that we get political and economic benefits. When I say political, I mean the implementation of the roadmap,” he said.