Palacios, a 65-year-old sociologist and longtime critic of Fidel Castro's communist government, said he was sent home from a military prison yesterday suffering from heart problems.
''I was in jail for almost four years that felt like 10. It was extremely unjust,'' he told reporters at his Havana home.
Palacios was arrested on March 22, 2003 in a crackdown on dissent than landed 75 pro-democracy activists in prison. He was sentenced to 25 years for conspiring against Cuba with its ideological enemy the United States.
Palacios was the 16th member of the group to be freed on health grounds and the first since Fidel Castro handed over power to his brother Raul after emergency surgery in late July.
The elder Castro has not appeared in public since, fueling growing speculation that he is too ill to govern again and may be close to death.
''I am optimistic and convinced that Cuba will change. I don't think it will happen immediately, but change will come,'' Palacios said.
Veteran Cuban rights activist Elizardo Sanchez welcomed the release of Palacios, but said repression has increased since Fidel Castro turned over leadership of Cuba and its ruling Communist party to his brother.
''This is good news, but it comes at a time of greater intolerance and repression of dissent,'' said Sanchez, head of the Cuban Commission for Human Rights.
''The question is what will happen to the 300 political prisoners still being held in Cuban jails,'' he said.
Four dissidents who were being held without trial since July 2005 were set free in recent weeks.
Sanchez said he was skeptical about further releases.
''Barring a miracle, we should be prepared for a worsening in the rights situation in the short term,'' he said.
REUTERS PB VC1006