The High Court on Wednesday ruled that settlers living in the outpost Mitzpe Kramim on the West Bank, and whose homes were built on privately owned Palestinian owned land, will not be evacuated.
The court relied on a provision of the law that specifies that if land was purchased in good faith and its true ownership was not known, the purchase remains in place.
The settler movement hailed the decision of the court.
Regional council mayor, Israel Gantz said he was overjoyed. "Now we must rebuild and expand the settlement, he said.
In the ruling, the judges said the homes will not be demolished but new homes in the outposts were not to be built. The court also ordered that Palestinians who can prove ownership of the disputed land, were to be compensated.
The decision cleared 45 homes in the outpost, that an earlier ruling demanded they be demolished.
But after the intervention of Defense Minister Benny Gantz, former attorney general Avichai Mandelblit and former justice minister Avi Nissenkorn, the court agreed to review the matter, and changed its ruling.
Left-wing organizations slammed the decision of the court claiming that the ruling will allow more land to be usurped by settlers at the expense of Palestinian owners.
"The provision used by the court should only be used in extreme cases," left-wing activists said.