A federal judge ordered Iran Wednesday to pay $247.5 million in damages to the family of an American woman who was killed in a suicide bombing in Gaza in 1995.

"The court is seeking to deter further terrorist actions by its action today," said U.S. District Court Judge Royce Lamberth.The victim, Alisa Flatow, a 20-year-old student from West Orange, N.J., was attending a Jerusalem seminary when she was killed along with seven Israeli soldiers on April 9, 1995. A suicide bomber drove a van into their bus in Gaza and blew it up.

Wednesday's ruling is believed to be the first time U.S. citizens were awarded punitive damages against a foreign nation accused of sponsoring terrorism. The decision leaves unanswered how much the Flatow family ultimately will receive.

The United States froze Iranian assets valued at $12 billion in 1979 after the overthrow of Shah Mohammed Reza Pahlavi and the taking of U.S. hostages.

A new law allows Americans to file suit in U.S. courts against another government's officials for damages from terrorism.

Stephen Perles, a lawyer representing Stephen Flatow, Alisa's father, said the money could either come from the frozen funds or from Iranian assets in other nations that recognize the jurisdiction of U.S. courts.

During a hearing early this month, lawyers for the Flatows argued that Islamic Jihad - the group blamed for the attack - was financed by the Iranian government. That, they said, makes Tehran responsible for her death.

In Jerusalem, David Bar-Illan, a senior aide to Prime Minister Benjamin Netanyahu of Israel, described the ruling as "a very, very important precedent that places the responsibility on terror-sponsoring nations for the actions carried out by their proxies."

"Terrorist acts against American citizens will cause some pain back in the country that sponsors that kind of terrorism," Sen. Frank Lautenberg, D-N.J., said Wednesday.

Lamberth said he awarded the family $225 million in punitive damages "to deter further terrorist attacks against Americans who happen to be in Israel." The award also included $20 million as compensation to the Flatow family for the loss of Alisa and the rest for her pain and suffering.