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December 4, 2013 – Iranian money being held in the US will be paid out to victims of a 1997 suicide bombing in Jerusalem, a San Diego federal court ruled Tuesday.

In his decision, Judge Barry Moskowitz ruled that the Iranian Defense Ministry must pay $9 million (NIS 31.6 million) in damages to nine plaintiffs, five of whom were victims of the double bombing in Jerusalem’s Ben Yehuda Street pedestrian mall, along with four family members of victims.

Five civilians were killed in the Hamas attack, including three 14-year-old girls, and many more were injured, including a number of US citizens. The United States has designated Hamas as a terrorist organization since 1997 and as “Specially Designated Global Terrorists” since 2001.

The plaintiffs were represented by the Tel Aviv-based Shurat HaDin – Israel Law Center, a legal advocacy group that seeks to bankrupt terror organizations through legal action.

The victims claimed Iran had provided training and money to Hamas, and in 2003 a US court ruled in their favor, awarding them $70 million (NIS 246.4 million).

But a lack of ties between the US and Iran made collecting the sum nearly impossible.

Shurat HaDin appealed to the court in 2003 to order a San Diego defense company, Cubic Defense Systems, to hand over money that Iran had paid during the Shah’s rule as part of a weapons deal. The US government also submitted a statement to the court supporting the plaintiffs.

The Iranian defense ministry signed a contract for $12 million worth of equipment in 1977, and paid the next year. However, in the wake of 1979 Islamic Revolution in the country and the US hostage crisis, a string of sanctions were passed against Iran and the equipment could not be delivered.

In the 1980s, a US court ruled that $2.8 million of the money paid by Iran should go back to Tehran.

Cubic Defense and Iran both claim that the remaining funds should be returned to Iran under the 1981 Algiers Accord, which was signed between the US and Iran to settle the hostage crisis. It requires the US to “restore the financial position of Iran, in so far as possible, to that which existed prior to November 14, 1979.”

The court ruled that the money paid to Cubic Defense was not covered by the accord, and also found that Iran’s claims of immunity were invalid in the case of private commerce. In addition, the US Congress passed laws removing diplomatic immunity from countries in cases in which Americans are killed by terrorists.

In his judgment, Moskowitz ordered title to the money to be transferred immediately to the plaintiffs, but delayed actual disbursement of the funds to allow Iran to appeal the ruling.

“While the US and EU are rushing to strengthen the law-breaking Iranian regime economically,” said attorney Nitzana Darshan-Leitner, director of Shurat HaDin, in a statement, “Shurat HaDin and the families it represents are not forgetting and are not forgiving the Iranians for financing terror that hit Israel.”