The decision by the Israeli High Court of Justice to order changes to the route of a section of the West Bank barrier is likely to have a significant impact on future construction.
By Simon Wilson
BBC News in Jerusalem
Israeli army planners will now have to go back to their drawing boards and come up with a new route for the area in question.
About a quarter of the proposed barrier has been built so far
They may also have to change plans for the barrier south of Jerusalem, where little has so far been built.
Around a quarter of the proposed length - some 200km (124 miles) - has been finished so far, a network of fences, walls, anti-vehicle ditches and other obstacles.
Most Israelis believe the barrier has had a significant impact in reducing the number of suicide attacks in the areas where it is in place.
However, many Palestinians living near the barrier say they are already suffering badly from being cut-off from jobs, schools and land they have farmed for generations.
More legal challenges
This latest ruling is also likely to encourage other Palestinian groups and anti-barrier protesters to make legal challenges through the Israeli court system, which governs the activities of the army and settlers in the occupied West Bank and Gaza Strip.
Many Palestinians are instinctively wary of the Israeli court system, believing it will ultimately back the army and settlers as it has done in previous court cases.
But now that the highest court in the land has ruled against the government, there may well be more group actions from affected Palestinian villages.
All this means there are likely to be significant delays in completing the barrier.
However, this is far from being a complete victory for opponents of the barrier.
Enshrined in the judgment are key decisions which may make future legal challenges difficult.
For example, the judges rejected the claim that the barrier was being built for political reasons - something that many Palestinians believe.
The court accepted the Israeli army's claim that it is acting to enhance Israel's national security.
One of the most important parts of this court decision may prove to be its judgement that it IS acceptable for Israel to take control of Palestinian-owned plots of land in the West Bank for urgent security reasons.
This is one of the key points about the Barrier on which the International Court of Justice in the Hague is expected to rule next week.
And on this central issue - whether Israel has the right to confiscate and build on occupied land - the court has ruled in favour of the Israeli establishment.