Sheikh Raed Salah, the detained leader of the Islamic Movement in Israel, has been granted bail by a court in London.
He was detained on June 28 in the UK during a speaking tour, allegedly for entering the country illegally.
Ismail Patel, chair of the activist organisation Friends of Al-Aqsa, who was at Friday’s bail hearing, said: "It is a tremendous relief that Sheikh Raed’s bail application was successful."
Earlier, as the hearing got under way at the Royal Courts of Justice, a group of 50 people protested peacefully outside, calling on the British authorities to grant bail.
A previous demand last week had been refused.
"We are shocked and horrified that a Palestinian leader can be held like this," Sarah Colborne, director of the Palestine Solidarity Campaign, told Al Jazeera.
"They gave no valid reason why bail was denied last week."
The arrest of Salah has drawn condemnation from Palestinian leaders across the political spectrum.
Most recently, the Arab League condemned the British government for the arrest in a statement, as reported by Press TV on Friday.
The League called for his immediate and unconditional release, stating that it had received the news of the arrest "with considerable shock and surprise".
The case has raised questions about UK’s security policy, and the decision-making process that determines which foreigners will and will not be prevented from visiting.
The UK interior ministry has said there was a ban order on Salah, but has not confirm when or why it was imposed.