The Israeli authorities had delayed the allocation of spectrum to the West Bank's second mobile phone licence holder for more than 18 months.
Wataniya Palestine won a competitive auction for the licence in December 2006 with a bid of JD251m ($354m) that has yet to be paid to the Palestinian National Authority.
Wataniya Palestine, which is 57 per cent owned by Wataniya of Kuwait, will now pay the licence fee to the Palestinian National Authority.
The authority's sovereign wealth fund, the Palestine Investment Fund, owns the remaining 43 per cent of Wataniya Palestine.
The second operator is expected to launch its services before the end of this year.