A spokesman for the group who attended the military trial said the demonstrators, including senior Fatah leader Abbas Zaki, were ordered to be freed without charges or conditions.
"The judge criticized the police and said very clearly that this was a peaceful protest and that no violence was used except by the police and the military," the spokesman, Jonathan Pollak, told AFP.
The military confirmed the 10 were ordered released.
The arrests were made on Sunday after about 150 demonstrators protesting against Israeli restrictions on travel from the West Bank walked through a lightly manned checkpoint outside Jerusalem with a donkey and a horse.
Palestinian arrested during march (Photo: Reuters)
Israeli security forces halted the group a few hundred meters past the checkpoint but Pollak said the arrests were made after the protesters had delivered speeches and started walking back to the West Bank.
The 10 were detained along with five Israelis, who were released later that day.
A protest on Wednesday outside the military prison where the 10 were being held turned violent, with Israeli border police firing tear gas and rubber bullets at Palestinian youths hurling stones.
Senior officials from the secular Fatah movement, which is led by the Western-backed president Mahmud Abbas and supports a negotiated two-state solution to the Middle East conflict, had attended Wednesday's protest.
Israel has restricted access to its territory from the West Bank to all but humanitarian cases and the holders of special permits since the start of the Jewish Passover holiday on Monday.
The closure was to continue until the end of the holiday next week.