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The High Court of Justice ruled Wednesday that dozens of existing buildings built in a controversial neighborhood of the West Bank settlement of Modi'in Ilit will not be demolished, despite the fact that they were built illegally and partially on private Palestinian land.

The High Court thus rejected a petition filed against the Matityahu-East neighborhood a year and a half ago by Peace Now and Bili'in Council. Residents of the West Bank village of Bili'in own some of the property on which the neighborhood was built.

In part, the court based its decision on the fact that the petitions should have been filed several years earlier.

Nonetheless, the High Court ordered settlers, the state, and construction companies to pay the petitioners' court fees, totaling NIS 160,000.

As a result of the ruling, the state will not remove the hundreds of settlers who stormed apartments they had purchased, after it became clear that construction company Heftsiba had collapsed.

Wednesday's ruling effectively seals the fate of the controversial settlement neighborhood, after on Tuesday the court ordered the state to alter the route of a 1.7-kilometer section of the West Bank fence, which had been designed to encircle the area on which additional parts of the neighborhood were to be constructed.

As a result, the court apparently has given approval to the existing status quo in the area - the existing part of the neighborhood will remain in place, but plans to expand the neighborhood will not be carried out.

For nearly three years, the fence has been the focus of weekly demonstrations at Bil'in, punctuated at times by violent confrontations between protesters, soldiers and police deployed at the site.