The city's Metropolitan Transportation Authority had refused the ads, citing a policy against demeaning language. The American Freedom Defense Initiative, which is behind the ad campaign, then sued and won a favorable ruling from a U.S. judge in Manhattan.
According to court documents, the ad reads: "In any war between the civilized man and the savage, support the civilized man. Support Israel/Defeat Jihad."
MTA spokesman Aaron Donovan said the ads would be displayed starting on Monday, but he could not say at which stations.
"Our hands are tied. The MTA is subject to a court ordered injunction that prohibits application of the MTA's existing no-demeaning ad standard," said Donovan.
In July, U.S. District Judge Paul Engelmayer ruled that the ad was protected speech. While agreeing with the MTA that the ad was "demeaning a group of people based on religion," Engelmayer ruled that the group was entitled to the "highest level of protection under the First Amendment."
The American Freedom Defense Initiative gained notoriety when it opposed creation of a Muslim community center near the site of the Twin Towers, which were destroyed in the September 11, 2001 attacks on the World Trade Center.
Pamela Geller, who heads the American Freedom Defense Initiative, could not immediately be reached for comment. In July, she called the judge's ruling "a great victory" for free speech.
Ibrahim Hooper, the spokesman for the Council on American-Islamic Relations, urged the MTA to donate any proceeds it collects to a "cause that promotes mutual understanding."
"It's like the anti-Islam film that is creating controversy. It is designed to offend, designed to provoke," Hooper said of the New York ad campaign.
A torrent of violence erupted last week after the short, poor-quality film made in California was posted on the Internet.
Demonstrations have rocked Muslim countries and last week the U.S. ambassador to Libya and three other Americans were killed in an attack on the U.S. embassy in Benghazi, Libya. U.S. and other embassies have been attacked elsewhere.
On Wednesday, a French magazine published cartoons of the Prophet Mohammad, drawing harsh criticism from Muslim leaders. (Reporting By Edith Honan; Editing by Dan Burns)
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