The ruling came in response to an appeal from Palestinian public prosecutor Ahmed al-Mughani. The current law says courts can choose life in prison or death.
Al-Mughani told the AP on Monday that the law isn't tough enough. In practice, Palestinian President Mahmoud Abbas has not approved executions since coming to power in 2004.
In the past there have been vigilante killings of Palestinians suspected of selling land.
Land sales are deeply sensitive among Palestinians. Many Palestinians sold land to Jews in the beginning of Zionist immigration in the late 1800s.
Some continue to sell their properties to Jewish settlers.
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