BUDAPEST, Hungary - A 97-year-old man was cleared Monday of war crimes charges stemming from a raid by Hungarian forces that killed 35 people in Serbia during World War II, shocking those who considered the case "one of the last major trials" of alleged Holocaust-era war criminal suspects.

Sandor Kepiro sits in a courtroom in Budapest July 18, 2011. [Photo/Agencies]

"It's an absolutely outrageous decision," Efraim Zuroff, the chief Nazi hunter with the Wiesenthal Center's Jerusalem office told The Associated Press.

It "flies in the face of all the evidence, everything we know about this dark event and the mass murder that took place in Novi Sad," added Zuroff, who brought Kepiro's case to light in 2006.

Sandor Kepiro had been charged by prosecutors with alleged involvement in the killing of the mostly Jews and Serbs during an anti-partisan raid in the Serbian city of Novi Sad, then under Hungarian control, on January 23, 1942. He returned to Hungary in 1996 after decades in Argentina.

In Serbia, deputy war crimes prosecutor Bruno Vekaric said they expected Hungarian prosecutors to appeal the verdict.

"Of course, we are not pleased," Vekaric said.

Prosecutors and the defense have until late Friday to appeal.

Hungary was a member of the Axis powers - allied with Germany, Italy and Japan - from 1940, participating in the 1941 invasion of Yugoslavia, of which Serbia was then part.

Prosecutors had stated in the trial which began May 5 that unidentified members of a patrol under Kepiro's command killed four people during the raid. Kepiro, at the time a gendarmerie captain, was also suspected of being involved in the deaths of around 30 others who were executed on the banks of the Danube River.

Many of the dozens of people attending the court session cheered and clapped after Judge Bela Varga read out the verdict of the three-judge tribunal.

Before reading out the verdict, Varga said Kepiro had been brought to the tribunal by ambulance and had spent the past week in hospital. The judge said he had apparently been given the wrong medication.

In a statement from Kepiro read out at the start of the court session, he rejected all the charges.

"I am innocent. I never killed, never stole. I served my country," said the statement read out by Kepiro's psychologist, who added that Kepiro said he returned to Hungary from Argentina in 1996 "because for him without Hungary there is no life."

In an unusual procedure, the verdict was being given over two days, Monday and Tuesday, because, on doctors' orders, only two court sessions of 45 minutes can be held daily due to Kepiro's frail health.

After Varga cleared him of the charges, Kepiro - who sat in a wheelchair during the session, had an IV drip in his arm and did not speak - was taken out of the courtroom by paramedics upon the request of his lawyer, Zsolt Zetenyi. After a brief recess, Varga continued reading out the full ruling, with only Zetenyi representing the defense.

Serbia's war crime prosecutor, Vladimir Vukcevic, and representatives of the Wiesenthal Center attended the session, leaving the courtroom after the verdict was announced.

In 1941, in the wake of the Nazi occupation and breakup of Yugoslavia, Hungarian forces entered northern Serbia -which had been part of Hungary until World War I. In early 1942, those Hungarian forces carried out raids to counter the growing number of alleged partisan attacks.

Kepiro said earlier that his task was to supervise the identification of people being rounded up, but he said he was unaware of the killings until after they had been carried out. About 800 Serbs and 400 Jews are thought to have been killed in the raids.

In January 1944, Kepiro and several other officers were convicted of disloyalty by a military court for their role in the Novi Sad raids. The 10-year prison sentence, of which Kepiro served a few weeks, was later annulled and his rank reinstated.