A US court in New York has found the Palestine Liberation Organisation and the Palestinian Authority liable for attacks in Israel over 10 years ago.
Six attacks in and around Jerusalem killed 33 people and wounded hundreds more during the second Palestinian intifada between 2002 and 2004.
The jury awarded victims of the attacks more than $218m.
The Palestinian groups expressed dismay at the court's decision and vowed they would appeal.
As some of the victims were American citizens, the lawsuit was filed in a US court.
After deliberating for a day, jurors ruled in favour of 10 American families who were seeking damages related to the six attacks.
The Israeli government has denied any official involvement in the lawsuit.
A joint statement by the PLO and the Palestinian National Authority (PNA) described the charges as "baseless" and said they were disappointed by the ruling.
The victims' families allege that internal documents show the attacks were approved by the Palestinian authorities.
"Those involved in the attacks still receive salaries from the Palestinian Authority and still get promoted in rank while in jail," said Nitsana Darshan-Leitner of the Israel-based Shurat HaDin Law Center, a lawyer who is representing the victims' families.
But defence lawyer Mark Rochon told jurors that the PA and PLO did not have knowledge of the attacks before they took place.
And he said the organisations could not be held liable for the actions of suicide bombers and gunmen, whom he argued acted alone.
The victims had requested more than $350m. The US Anti-Terrorism Act could yet allow for the fine to be tripled.
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