A Palestinian magistrate court ruled on Monday to release a journalist jailed for a week over his report in the Jordanian press, on bail of 5,000 Jordanian dinars.
Yousef Al-Shayeb will be freed while investigation of the case is ongoing, the court said.
On Wednesday a Palestinian court extended his remand for 15 days. He is being held while under investigation for "libel" and "defamation" for his newspaper article in January.
Al-Shayeb was jailed after a complaint filed by Foreign Minister Riyad Malki and Hael al-Fahoum, the envoy in Paris.
His report in Al-Ghad newspaper documented corruption allegations against the Palestinian diplomatic delegation in France, the Palestinian National Fund and the foreign minister.
Foreign Minister Riyad al-Malki on Thursday defended his role in the reporter's arrest, after the Palestinian journalists union held protests and called for members to boycott a press freedom prize announced by the PA days earlier.
"I'm surprised some journalists reacted emotionally on behalf of their colleague without hearing the other side's case, or considering for a moment if Yousef al-Shayeb is the oppressor or the oppressed," Al-Malki told Ma'an.
He maintains al-Shayeb knew beforehand of falsehoods in his report, which claims al-Malki illegally promoted a diplomat to the post of deputy ambassador despite having knowledge of his ties to foreign intelligence.
The attorney general said Sunday the PA sees "no problem" in detaining journalists who break the law.
"Any journalist is allowed to publish any information he wants to, after proving it with evidence rather than basing it on (rumors on) Facebook and other networking sites," Ahmad al-Maghni said.
Meanwhile, the International Federation of Journalists called for al-Shayeb's release, warning that the case will lead to self-censorship and undermine public trust in the media.
"The protection of sources is universally accepted as an essential tenet of independent reporting," IFJ president Jim Boumelha said in a statement.
"Journalists the world over will be outraged that Shayeb has been sentenced for upholding such a basic principle. He has no case to answer and should be released immediately," he said.