Rachel Corrie, the young American woman who was run over by a military bulldozer in 2003 as she protested housing demolitions in the Gaza Strip.

The lengthy verdict in the civil case, read to a courtroom packed with supporters of Ms. Corrie’s family here, called the death an accident that occurred during “a military activity meant to prevent terrorist activity.”

“She chose to put herself in danger,” said the judge, Oded Gershon. “She could have easily distanced herself from the danger like any reasonable person would.”

Since her death, Ms. Corrie has become an international symbol of the Palestinian resistance. A play based on her writings has been performed in 10 countries, and a ship in an aid flotilla to Gaza bore her name. Numerous books and documentaries have told of how Ms. Corrie, a 23-year-old student, stood in an orange vest with a bullhorn between a bulldozer and the home of a Palestinian family in March 2003 during the height of the second intifada, or uprising.

A lawyer representing the state said after the hearing on Tuesday that the driver of the bulldozer did not see Ms. Corrie and could not have.

But at a news conference after the verdict, the Corrie family’s lawyer, Hussein Abu Hussein, showed pictures of Ms. Corrie taken that day in 2003, pointing out her bright garb that he said “anyone could have seen.”

“It’s a black day for activists of human rights and people who believe in values of dignity,” Mr. Hussein said. “We believe this decision is a bad decision for all of us — civilians first of all, and peace activists.”

Mr. Hussein said the family would appeal the decision within 45 days to the Israeli Supreme Court. Family members said they would continue speaking publicly about the case and what they say was Israel’s failure to properly investigate it.

“A civil lawsuit is not a substitute for a legal investigation, which we never had,” Ms. Corrie’s mother, Cindy Corrie, said at the news conference. “The diplomatic process between the United States and Israel failed us.

“Rachel’s killing could have and should have been avoided,” Mrs. Corrie said.

Bill Van Esveld of Human Rights Watch called the verdict “a missed opportunity” for the Israeli Defense Force to reform an investigative system that he characterized as deeply flawed.

“The idea that there can be no fault for killing civilians in a combat operation contradicts Israel’s international legal obligations to spare civilians from harm during armed conflict and to credibly investigate and punish violations by its force,” he said. “Military investigators repeatedly failed to take statements from witnesses, to follow up with the witness’s lawyer and to re-interview witnesses to clarify discrepancies.”

The verdict came more than a year after the last of 15 sessions of oral testimony, which began in March 2010. Most of the witnesses, including the drivers and commanders of two bulldozers that were operating in the area that day, testified from behind a screen to protect their identities. Ms. Corrie’s parents and sister attended every session of the trial, spending about $200,000 on travel, translation services and other expenses.

Sarah Corrie Simpson, who has met with more than 200 Congressional offices in Washington about the case, said she remained convinced that the driver of the bulldozer saw her younger sister. “I hope someday he will have the courage to sit down in front of me and tell me what he saw and what he feels,” Ms. Simpson said.

In an interview before the verdict, Ms. Corrie’s father, Craig Corrie, said, “You don’t really close a wound like this, but it certainly is a big milestone.” At meetings across Israel over the past week, Mr. Corrie carried with him a picture not of his daughter but of the Palestinian girl, then 6, whose family’s house Ms. Corrie died trying to protect.

“I think this one in some ways is more hopeful,” he said of the picture. “She deserves a future that we all want for our children.”

Before the court session on Tuesday, a small group of young people stood vigil outside, holding signs with pictures of Palestinian families and their demolished homes. A woman walking by shouted at them, “It’s the houses of terrorists they’re destroying,” prompting one of the protesters, Uri Gordon, to respond, “No, of normal people, actually.”

“It’s a defensive reaction,” Mr. Gordon said afterward. “It’s another indication of Israeli society’s refusal to face up to the crimes of its government.”