Charges have been dropped against four Palestinians accused of being involved in a fatal bomb attack on a US diplomatic convoy last October.
Three US security personnel from the embassy in Tel Aviv died in the attack, near the Erez border crossing between Israel and the Gaza Strip.
Palestinians sources said no evidence had been offered against the men.
The incident was the first fatal attack on US officials since the intifada began in late 2000.
Correspondents say it is not clear whether the easily identifiable convoy was deliberately targeted.
The four were arrested several weeks ago by the Palestinian authorities and charged with manslaughter and planting bombs aimed at Israeli tanks.
They are said to be members of the Popular Resistance Committees, a group which is known to use methods similar to those employed in this attack.
Israeli military officials have alleged that the committees are directly linked to the Palestinian police, describing them as the “terror wing” of the security services in the Palestinian territories.
However, US diplomats had earlier questioned whether the men were to blame or simply scapegoats, and there have been suggestions that they were arrested to ease US pressure on Palestinian investigators.
The US authorities have offered a $5m reward for information about the attackers, but Palestinian officials say no-one has yet claimed the money.