Because no one posted it yet, here’s the decision (on a PDF file): http://www.ca9.uscourts.gov/ca9/newopinions.nsf/6DFD4322CA06B5FA88257359005660A6/$file/0536210.pdf?openelement
I haven’t read it yet, but from a quick scan it looks like the court didn’t get to the merits but booted the suit on the ground of the “political questions” defense. For those unfamiliar, and very roughly, that doctrine directs the court to dismiss a suit when the claims’ resolution turn on a political question, i.e., a matter committed to the discretion of one of the political branches of government - the Legislative and/or Executive.
In this case, while the bulldozers were purchased by Israel, they were financed by the USA; thus Israel’s possession of the CATS was really a result of United States foreign policy.