An Israeli psychiatric panel has found accused child abuser Malka Leifer fit to stand trial for extradition to Australia, where she faces 74 counts related to sexual assault.

Key points: Ms Leifer's alleged victims immediately welcomed the latest development in the court case

Ms Leifer's alleged victims immediately welcomed the latest development in the court case Alleged victim Dassi Erlich, wrote on Twitter that the decision was "incredible news"

Alleged victim Dassi Erlich, wrote on Twitter that the decision was "incredible news" Advocacy group Kol v'Oz CEO Manny Waks said the panel's findings were to be presented at a court hearing on Tuesday

According to Ms Leifer's lawyers, the psychiatric panel "accused her of faking mental illness to avoid extradition", the Guardian reported.

The decision is a major breakthrough in a long-running case that has strained relations between Israel and Australia and upset members of Australia's Jewish community.

The 74 counts of sexual assault Ms Leifer faces are related to accusations brought forward by three sisters who say they were abused by Ms Leifer when she was the principal of the ultra-Orthodox Jewish school they attended in Melbourne.

Ms Leifer's alleged victims immediately welcomed the latest development in the court case.

"To have this news is a massive lift to the whole entire campaign that we've been running for the last three years and the weight we've had for the last six," Nicole Meyer said.

Ms Meyer's sister, Dassi Erlich, wrote on Twitter that the decision was "incredible news".

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In 2008, as the allegations surfaced, the Israeli-born Ms Leifer left the school in Australia and returned to Israel.

After Australia filed an extradition request, Ms Leifer was put under house arrest in 2014 and underwent the beginnings of an extradition process.

But that ended in 2016 when a mental health evaluation determined she wasn't fit to stand trial.

Ms Leifer was again arrested in early 2018 after an investigation claimed to have caught her leading a seemingly normal life, and questioned her claims of suffering from mental illness.

The court asked for another psychological review and she has since been held in Israeli custody.

Frustration among Australia's pro-Israel Jewish community

On Thursday, Channel 13 reporter Aviad Glickman tweeted that the panel of experts had found her fit to stand trial. The Justice Ministry later confirmed the report.

Ms Leifer is a former principal of the Adass Jewish school in Melbourne. ( Supplied )

Manny Waks, chief executive officer of the sexual abuse victims' advocacy group Kol v'Oz, said the panel's findings were to be presented at a court hearing on Tuesday, after which the judge would decide whether the extradition hearings can proceed.

He said his organisation would do, "all that we can to ensure Leifer is put on a plane back to Australia as soon as possible".

The repeated delays in the case have strained relations with Australia, one of Israel's closest allies, coming up in discussions between the countries' leaders and in debates in Australia's Parliament.

Leaders of Australia's pro-Israel Jewish community have also expressed frustration.

Those frustrations have been amplified by the alleged involvement in the case of Israel's ultra-Orthodox Health Minister, Yaacov Litzman.

Israeli police have recommended charges of fraud and breach of trust against him arising from claims he pressured ministry employees to skew Ms Leifer's psychiatric evaluations in her favour, allegations Mr Litzman has denied.

Ms Leifer's attorney, Yehuda Fried, did not immediately respond to a request for comment.

ABC/AP