The Islamic militant group, which calls for the destruction of Israel, hailed the decision. Israeli Prime Minister Benjamin Netanyahu urged the EU to reverse it.

Hamas was put on the EU terrorist list as part of broader measures to fight terrorism in the wake of the Sept. 11, 2001 attacks. It won elections in 2006 and runs Gaza, and has long contested the classification.

The EU court ruled Wednesday that the listing was based on press and Internet reports and not on "acts examined and confirmed in decisions of competent authorities."

The court insisted that its ruling did not "imply any substantive assessment of the question of the classification of Hamas as a terrorist group." It therefore ruled that the asset freezes should stay in place for three months pending further EU actions.

The EU is considering its next steps. It has two months to appeal.

The terrorist list designation bars EU officials from dealing with the group, and requires that any of the group's funds in EU countries be frozen.

The decision comes amid growing pressure from European legislators to recognize a Palestinian state, after years of stalemate in peace talks. There was also growing frustration in Europe with Israel's government after the Gaza war earlier this year.

Salah Bardawil, a Hamas official in Gaza, called the decision a "strong, good shift" that he said would ultimately lead to European action against Israel.

Netanyahu said Hamas is "a murderous terror organization" and called for Hamas to be immediately returned to the list. (*****)

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