An Argentine judge on Thursday dismissed allegations that President Cristina Fernandez tried to cover up Iran's purported involvement in the deadly bombing of a Jewish center in 1994.
The judge "discontinued" the case brought by prosecutor Alberto Nisman, who was found dead in mysterious circumstances in January the day before he was to appear in Congress to discuss his criminal complaint.
The scandal shocked the country and hurt the government's credibility ahead of October's presidential election.
The decision by judge Daniel Rafecas sparked divided opinions on whether the government had a hand in the ruling. About 400,000 Argentines marched last week to demand a more independent judiciary.
The allegation that Fernandez sought to whitewash the investigation into the truck bombing of the AMIA Jewish community center in Buenos Aires was first made by Nisman in mid-January.
Four days later he was found dead, spawning a torrent of conspiracy theories and raising long-festering questions about interference and intimidation in the justice system.
Thursday's ruling will alleviate some political pressure on Fernandez, whose popularity has dipped during the scandal.
"The judge's decision certainly favors Fernandez, but it will probably not have an impact on the October elections," said Ignacio Labaqui, Argentina analyst for Medley Global Advisors.
"The damage (to candidates allied with Fernandez) is already there," he added. "According to polls, the bulk of public opinion believes that Nisman's accusation was true and that he was murdered."
The inquiry into the alleged cover-up was given this month to prosecutor Gerardo Pollicita, who submitted the complaint.
"The judge held that the ... complaint was not strong enough to initiate criminal proceedings because it did not support the alleged cover-up or obstruction of the investigation" into the AMIA bombing, said a statement from the judiciary branch's information service.
Pollicita's office said no decision had yet been made on whether to appeal.
Fernandez called Nisman's cover-up claims "absurd" and said he had been duped by rogue security agents. She said she believed the agents then killed Nisman after using him to smear her. Iran has consistently denied the allegations.
Nisman's body was found in his apartment on Jan. 18, a bullet in his head.
The ruling came in time for the president's last state of the union address on March 1 and decreased the likelihood that Nisman scandal would escalate in the short term.
Still, public opinion remained divided.
"The judge must be pretty sure that there is not enough incriminatory evidence to throw this out. It has been such an important case for the country," said telecoms worker Edith Gallante.
But 26-year-old kiosk owner Leonardo Venega said: "I think the government had a hand in this, as always. The judge should not have thrown this out."
(Additional reporting and writing by Richard Lough; Editing by W Simon,Grant McCool and David Gregorio)