The Supreme Court rejects the State's appeal against rulings made by the Administrative Court to the effect that children of Israeli residents who were born and live in Israel can be registered in the Israeli population registry even if they were registered in the Palestinian population registry: The Court ruled that not everyone registered in the Palestinian population registry is necessarily a resident of the Territories and that the amendments to the law must not be retroactively applied to applications submitted before it was passed, at least until the amendment to the Entry into Israel Law.

In March 2005, HaMoked filed a petition against the Interior Ministry's decision not to award permanent residency to the children of a resident of East Jerusalem solely because the children were registered in the Palestinian population registry; this despite the fact that the children were born in Jerusalem and lived there with their mother. HaMoked claims that the Nationality and Entry into Israel Law (Temporary Order), 5763 – 2003 does not apply in the case of children, as, according to the law at the time the application was submitted, the children are not considered residents of the Territories and the amended provisions of the law cannot be applied retroactively. Furthermore, even if the children were considered residents of the Territories under the law, its exception clause does allow the Minister of the Interior to award the children permanent status. The Administrative Court accepted the petition, ruled that there was no legal justification for the Interior Ministry's decision and ordered the children be registered in the Israeli population registry with the same status as their mother. The Interior Ministry appealed the decision in this case, handled by HaMoked, and in others in which the Administrative Court ruled similarly. After the Interior Ministry retracted the appeal in HaMoked's case, HaMoked joined the hearing on issues of principle in the remaining pending cases as amicus curiae. 

On 10 August 2008, the Supreme Court rejected the appeals filed by the Interior Ministry and ruled that the legislature had not intended to apply the provisions of the Nationality and Entry into Israel Law (Temporary Order), 5763 – 2003 retroactively. According to the Court's interpretation of the Law, as it was at the time the applications under consideration were submitted, not everyone registered in the Palestinian population registry is automatically considered a resident of the "Area"; but that one must take note of where this person actually lives – that is a person's residency is not determined necessarily by where he is registered but by where he lives. 

The judgment also addressed the manner in which the Interior Ministry is to use its discretion while processing an application filed under Regulation 12 of the Entry into Israel Regulations (which deals with the registration of children born in Israel to Israeli residents). On this issue, the Court ruled that the Interior Ministry must give considerable weight in favor of the child and the cohesion of the family unit. However, despite rejecting the appeal, and despite not being asked to address this point, the Court did rule that in extreme cases, the Interior Ministry could prevent the registration of a child owing to security information against his family.