A landmark ruling issued Tuesday by New York State's Appellate Division allows a lawsuit against the Bank of China (BOC) for its role in sending money to terrorist groups Hamas and Palestinian Islamic Jihad.

The lawsuit was filed in 2008 by the families of 20 victims of terrorist attacks in Israel. It alleges that BOC made millions of dollars in wire transfers to Hamas and the Palestinian Islamic Jihad (PIJ) that helped fund attacks against Israelis between 2004 and 2007. The ruling affirms a July 2011 decision by the New York Supreme Court denying the defendant's motion to dismiss the lawsuit.

The United States designated both Hamas and PIJ as Foreign Terrorist Organizations in 1997 and as Specially Designated Global Terrorists in 2001.

The New York court determined that Israeli law should govern hearing in the case. "We hold that Israel, the location of the plaintiffs' injuries, has the greater interest in seeing its laws enforced, and Israeli law should govern this action," the decision reads. Applying Israeli law will also make it easier for the non-American plaintiffs in the case to hold BOC responsible for channeling funds to PIJ and Hamas.

The ruling also argued in support of New York as "a suitable forum because at least some of the wire transfers were allegedly executed through BOC's New York branches." The court denied a BOC motion that the case be tried in China since the bank has its headquarters there.

China does not consider Hamas to be a terrorist group.

Plaintiffs in the case include surviving relatives of Emi Elmaliah, Israel Zamalloa and Michael Saadon, who were murdered in a January 2007 PIJ-sponsored suicide bombing at a bakery in Eilat.

The New York appellate ruling follows on the heels of a decision issued by an Ontario Superior Court to freeze approximately $2.6 million in more than a dozen Canadian bank accounts associated with the Islamic Republic of Iran for patronizing Middle East terror groups such as Hamas and Hizballah.

Earlier this week, a ruling by a New York judge allowed authorities to take possession of a 36-story Fifth Avenue office tower worth $500-$700 million that was owned by Iranian front groups in the US, the Alavi Foundation and Assa Company.