The Palestinian Islamist group Hamas should be removed from the European Union's terrorist list, an EU court ruled on Wednesday, saying the decision to include it was based on media reports not considered analysis.
However, in its ruling, the bloc's second highest tribunal, the General Court of the European Union, said EU member states could maintain their freeze on Hamas's assets for three months to give time for further review or to appeal the verdict.
Israel, which has clashed repeatedly with Europe in recent years over Palestinian statehood ambitions, reacted with dismay.
"We expect them to immediately put Hamas back on the list," Israeli Prime Minister Benjamin Netanyahu said in a statement, denouncing Hamas as "a murderous terrorist organization".
Hamas holds sway in the Gaza Strip and its founding charter calls for the destruction of Israel. It has regularly battled against Israel, most recently in a 50-day war this summer.
Most Western countries, including the United States, agree with Israel that it is a terror organization, pointing to indiscriminate rocket strikes out of Gaza and waves of suicide attacks, primarily between 1993 and 2005.
Hamas says it is a legitimate resistance movement and contested the European Union's decision in 2001 to include it on the EU terrorist list. It welcomed Wednesday's verdict.
"The decision is a correction of a historical mistake the European Union had made," Deputy Hamas chief Moussa Abu Marzouk told Reuters. "Hamas is a resistance movement and it has a natural right according to all international laws and standards to resist the occupation," Marzouk said.
The EU court did not consider the merits of whether Hamas should be classified as a terror group, but reviewed the original decision-making process. This, it said, did not include the considered opinion of competent authorities, but rather relied on media and Internet reports.
"The court stresses that those annulments, on fundamental procedural grounds, do not imply any substantive assessment of the question of the classification of Hamas as a terrorist group," the court said in a statement.
It added that if an appeal was brought before the EU's top court, the European Court of Justice, the freeze of Hamas funds should continue until the legal process was complete.
Appeals, which can only be based on points of law, typically last about a year and a half.
The EU's ambassador to Israel Lars Faaborg-Andersen told Israel's Army Radio the body aimed to keep Hamas on the list.
"Sometimes the courts come to decisions which surprise us. We need to assemble a stronger case for the listing and this is what we are going to do," Faaborg-Andersen said.