At the hearing on Tuesday, the court decided to act in line with the appeal court's decision to overturn the ruling.
The prosecutor said the journalist should be acquitted in line with the EU reforms Turkey has recently passed.
Lawyer Mustafa Erdogan also said that Yildiz should be acquitted.
Yildiz was charged with "insulting the armed forces of the state," by writing about the book in her column called "A Book Each Week."
The case, which has been ongoing since June 21, 2001, has gone back and forth between the local court and the appeals court. (EO/BB/EA/YE)