An Israeli court has ruled that the state of Israel was not at fault for the death of US activist Rachel Corrie, who was killed in the Gaza Strip by an Israeli army bulldozer in 2003.Ms Corrie's family had brought a civil claim for negligence against the Israeli ministry of defence.
The judge said the 23-year-old's death was a "regrettable accident".
He said the state was not responsible for any "damages caused" as they had occurred during "war-time actions".
Judge Oded Gershon, presiding at the court in the town of Haifa, said Ms Corrie had been protecting terrorists in a designated combat zone.
He said the bulldozer driver had not seen her, adding the soldiers had done their utmost to keep people away from the site. "She [Corrie] did not distance herself from the area, as any thinking person would have done."
He ruled the state of Israel did not have to pay any damages. The Corries had requested a symbolic $1 in damages and legal expenses.
They had accused Israel of intentionally and unlawfully killing their daughter, and failing to conduct a full and credible investigation.
An Israeli army investigation in 2003 concluded its forces were not to blame for Ms Corrie's death.
Ms Corrie's parents, Cindy and Craig, who had once again made the long trip to Israel from the US to pursue their case, looked dejected after the ruling was read out, says the BBC's Jon Donnison in Haifa.
"I am hurt," Cindy Craig told reporters after the verdict was read.
The family's lawyer has said they will appeal against the ruling to Israel's supreme court.
Ms Corrie was a committed peace activist even before her arrival in the Gaza Strip in 2002.
She arranged peace events in her home town in Washington State and became a volunteer for the pro-Palestinian International Solidarity Movement (ISM).
In 2003, Ms Corrie was in the town of Rafah in the southern Gaza Strip as part of a group of ISM protesters.
They were acting as human shields to try to stop the Israeli army demolishing Palestinian homes and clearing land around Rafah.
The Israeli army argued the area was being used by militants and that the protesters should not have been in a closed military zone.
The army's investigation found that Ms Corrie was not visible and that she was killed by debris falling on her.
But Ms Corrie's supporters say it is impossible that the bulldozer driver did not see her.
Pictures taken on the day Ms Corrie died show her in an orange high-visibility jacket carrying a megaphone and blocking the path of an Israeli military bulldozer.
A collection of Ms Corrie's writings was turned into a play - My Name Is Rachel Corrie - which has toured all over the world, including Israel and the Palestinian territories.
An aid ship intercepted by the Israeli military in 2010 while trying to break the blockade of Gaza was named after her.