The high court postponed its ruling until October 3, only five days before the scheduled October 8 date for the elections.
Two weeks of campaigning are usually alloted for Palestinian elections and had been set to begin on Friday.
"The decision is postponed until the 3rd of October," said Hisham al-Hatoo, head of the Palestinian high court in the Fatah-led West Bank.
On September 8, the court suspended the elections following disputes between the rival Fatah and Hamas movements over candidate lists.
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Fatah and Hamas have not contested an election since 2006 parliamentary polls, which Hamas won -- sparking a conflict that led to near civil war in Gaza the following year.
This year's vote was planned with 81-year-old president Mahmud Abbas under heavy political pressure as opinion polls have suggested most Palestinians would like him to step down.
There has been no Palestinian presidential election since 2005 and Abbas has remained in office despite the expiry of his term.
Abbas is currently in New York ahead of his UN General Assembly address tomorrow.
Despite repeated reconciliation attempts, Hamas and Fatah have failed to bridge their differences and form a unified administration for the Palestinian territories.
The October vote was to choose municipal councils in some 416 cities and towns in Gaza and the Israeli-occupied West Bank.
It is seen by some analysts as a test of whether Hamas and Fatah can take a significant step towards reconciliation.