"The court did not find evidence to support charges against Omar Mahmud Mohammed Otman (Abu Qatada) that he conspired in late 1998 to carry out a terror attack on the American school in Amman," judge Ahmad Qatarneh said in a ruling.
"Based on that, the court unanimously declares the innocence of Omar Mahmud Mohammed Otman for lack evidence," added Qatarneh, before asking journalists to leave the court.
The cleric, who was deported from Britain last July after a 10-year legal battle, burst into tears when the judge made the ruling and members of his family rushed to hug and kiss him.
A year later, he was sentenced in absentia to 15 years for plotting to attack tourists in Jordan during millennium celebrations.
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In line with Jordanian laws, he is now appearing in a retrial and has pleaded not guilty to all charges.
The court adjourned the trial until September 7.
Reacting to the ruling, British Immigration and Security Minister James Brokenshire said the retrial was made possible due to the British government's "determination to successfully deport him from the UK."
"We await a verdict on the remaining charge.