A federal judge in New York has denied Arab Bank's motion to dismiss a lawsuit on behalf of 296 Palestinian terror victims, clearing the case for trial later this year.

The lawsuit accuses Arab Bank of violating the U.S. Anti-Terrorism Act by "soliciting, collecting, transmitting, disbursing and providing the financial resources that allowed those organizations to flourish and to engage in a campaign of terror…" Part of that was done through funds from a Saudi charitable group which allegedly was used as "death insurance" for families of Hamas suicide bombers.

Lead plaintiff Courtney Linde lost her husband John during a 2003 attack in Gaza while he was guarding American diplomats.

U.S. District Judge Nina Gershon rejected some specific claims during a hearing Wednesday, but otherwise cleared the case for a jury trial which could come this fall.

It was filed in 2004. Attorney Gary Osen expressed relief to clear the last hurdle before a trial. "From our standpoint, it's time for the bell to toll," he said.

An Arab Bank spokesman called the banking activity at issue "routine and lawful" and said the bank didn't know there would be any connection to terrorist acts. But in a previous ruling, Gershon said Arab Bank would not be able to argue it was ignorant about doing business with Hamas.

In March, another federal judge paved the way for a similar lawsuit to proceed to trial against Credit Lyonnais, a leading European bank.

American courts have awarded billions of dollars in damages against Iran for its sponsorship of terrorist groups, but victims have had difficulty collecting on those rulings due to opposition from the State and Justice departments which object to seizing assets of foreign governments. A judgment against Arab Bank would be a different matter.