Rav Yitzchok Yosef, the former Sephardi chief rabbi of Israel, voiced his support for releasing terrorists “with blood on their hands” as part of a deal to free hostages held in Gaza.

 
“There’s mortal danger in the future if you release terrorists with blood on their hands. They could kill us. But that’s not right now. The hostages are right now. There’s negotiation. In halacha, the psak is that it’s permissible to release those accursed terrorists and if they do something, even minor, they can kill them right away,” Rav Yosef said during an event at the President’s Residence in Yerushalayim.
He continued: “Let them wrap up the deals, let them make the deal quickly. It can’t be helped. It’s permissible to release terrorists with blood on their hands. They released Yahya Sinwar and we saw what he turned out to be. But this is mortal danger. If we don’t release them now, [the terrorists] will kill the hostages.”
Rav Yosef’s father, Chacham Ovadia Yosef, who also served as Sephardi chief rabbi, expressed approval for the release of terrorists with blood on their hands for the release of Gilad Shalit in 2011.
Israel is currently negotiating with Hamas on a deal for the release of the hostages, which would also involve some form of ceasefire. Hamas is demanding an end to hostilities and the release of many Palestinian prisoners, including those convicted of murder, in exchange for the hostages.
{Matzav.com Israel}