The police recently dropped charges against a man who violated a law barring Israelis from repairing their cars in areas controlled by the Palestinian Authority.

The man, Meir Iluz, argued in court that the law, which is intended to prevent car theft and trade in stolen car parts, was racist. When in 2009 Iluz, who lives in the Ramot neighborhood of Jerusalem, could not start his car, he never imagined that taking the vehicle to a garage in the East Jerusalem neighborhood of Pisgat Ze'ev would result in an indictment.

"The car broke down," said the 28-year-old, "so I had to have it towed. I called a friend who recommended a garage at the Coca-Cola junction [in Pisgat Ze'ev]. I did not know the place but trusted my friend. The garage is on a road that all Israelis use."

However, the garage was under police surveillance. "Apparently the police raided the garage when my car was being repaired there," Iluz said. Several hours later he received a call from the police summoning him for questioning. "I did not understand what they wanted, but I had no choice. I went there and they asked about my car. I told them that it was at the garage. Then an officer said: 'You will be punished; you will not have a car for two weeks.'"

When Iluz asked for more details the police told him that the garage was in an area controlled by the Palestinian Authority, and that he had violated the law.

Iluz was under the impression his only punishment would be the car being impounded for two weeks. But a year and a half later, he received a letter informing him that the police had decided to press charges against him.

"I could not believe it! What did I do? Since then, the insurance company refuses to insure me, all because I took my car to the garage," he said.

Iluz's defense attorney, Itamar Ben-Ami, decided to argue that the law itself was flawed. "How does the law prevent car theft? By barring repairs in PA territory, which implies that all Palestinians are thieves."

Ben-Ami went on to argue that the next step would be to ban any trade with Israeli Arabs, and said that this was "reminiscent of nasty days from World War II."

The court asked the police to respond to the argument, which they did by dropping the charges. The police said the charges were dropped because of difficulties in collecting evidence.

The Knesset first passed a law limiting the use and registration of used car parts in the late 1990s, but the amendment to the law, which imposes criminal liability on Israelis who get their cars fixed in territories under PA control, was passed only in March 2008.

The amendment, initiated by MK Moshe Kahlon (Likud ), bans all car repairs of any kind anywhere in the West Bank except in Jewish settlements. It also states than anyone who does so is may incur a maximum three-year prison sentence and may have his or her driver's license and car registration revoked.