...U.S. District Judge George Daniels said the 2004 lawsuit on behalf of victims and their families can proceed toward trial. It seeks up to $3 billion in damages from attacks between January 2001 and February 2004.

Daniels rejected the PLO's argument that two machine-gun attacks and five bombings were acts of war. The Jerusalem-area attacks killed 33 people and wounded hundreds, including scores of U.S. citizens.

Daniels said the attacks targeted public places -- not military or government personnel or interests. Two bombings were on downtown streets; others occurred at a crowded bus stop, a cafeteria at the Hebrew University and a passenger-filled civilian bus.

The use of bombs in these circumstances indicates an intent "to cause far-reaching devastation upon the masses," the judge said, with a "merciless capability of indiscriminately killing and maiming untold numbers in heavily populated civilian areas."

Such attacks "upon non-combative civilians, who were allegedly simply going about their everyday lives, do not constitute acts of war," he said.

Daniels also said the violence meets the legal definition of "international terrorism."...