The Petach Tikva Magistrate's Court dismissed the police's and Shin Bet's request to keep Pearlman in prison and questioned the evidence available against him.
However, the court accepted the police's request to postpone Pearlman's release until a district court appeals the decision.
Pearlman is suspected of murdering four Arabs and attempting to kill another seven. However, investigators dealing with the high-profile case have encountered difficulties in establishing the charges against him.
In Wednesday's hearing, Judge Nachum Sternlicht said a lineup used to identify Pearlman was problematic because the suspect's photos were published beforehand, thereby failing to constitute positive identification. The court added that another suspect, facing no less grave offences, had not been detained, thereby constituting discrimination against Pearlman.
Court releases Pearlman from jail (Photo: Ofer Amram)
In his ruling, the judge said, "The severity of the allegations attributed to the suspect must be stressed. The evidence that was gathered led to his arrest, but it was not enough in order to file an indictment, and therefore an open investigation was launched. It does not appear that during this investigation sufficient evidence was gathered to file an indictment and prove guilt."
Shin Bet: Pearlman still prime suspect
In a rare move, the Shin Bet published a response to the court's decision.
"At this point, sufficient evidence to prosecute Pearlman has not been collected. However, the suspicions against him have not been disproved, and the Shin Bet still considers Pearlman the main suspect in the attacks," the Shin Bet said.
The Shin Bet said a prolonged undercover investigation was held prior to Pearlman's arrest and interrogation. The undercover probe was led by the intelligence agency in coordination with the State Prosecutor's Office, "and the decision to make an arrest was taken only following the investigation."
The Shin Bet added: "Serious suspicions were raised during this investigation, some of which are based on Pearlman's own remarks about his personal involvement in a line of murder and stabbing attacks, and his involvement in other serious offenses."
Lawyer: Pearlman tortured
Pearlman, a and member of the Kach Movement, was arrested by the Shin Bet and Jerusalem Police on suspicion of stabbeing four Arabs in the 1990s. Three other suspects were subsequently arrested in connection with the affair but later released.
Pearlman's remand was extended several times, but the court ruled on Wednesday there was no significant evidence to convict him.
Pearlman's attorney Adi Keidar claimed that his client had been tortured by the Shin Bet during his interrogation. A complaint on the matter was filed with the Police Investigations Unit and copies were sent to the attorney general and state prosecutor.
Pearlman's wife, Keren, lauded the decision to release him from prison, saying "this is the month of mercy and forgiveness."
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