In June, the Oslo District Court had authorised the extradition of the 60-year-old Mullah Krekar, the religious leader of a Kurdish network suspected to be linked to the Islamic State group.
A refugee in Norway since 1991 but not a citizen, Krekar is accused by Italy of leading the Rawti Shax, a network that has planned to carry out attacks in the West.
Krekar, whose real name is Najmuddin Ahmad Faraj, had appealed the case, which was rejected on Friday by the Oslo appeals court that authorised the extradition of another suspect in the case, Kamil Jalal Fatah.
Krekar's lawyer, Brynjar Meling, told AFP that his client was now going to the Supreme Court.
Meling said his client had merely made an attempt to form a political party in Iraqi Kurdistan. “This has nothing to do with terrorism,” he told TV2.
The lawyer has repeatedly accused Norway of using the case as an excuse to get rid of a cumbersome Krekar, who cannot be deported to his country. Krekar has twice been sentenced to prison in Norway because of threats and inciting violent behaviour.
He has been at risk of deportation since 2003 after Norwegian authorities ordered him to be expelled as a threat to national security.
While courts have upheld the ruling, Norwegian law bars him from being deported to Iraq, where he risks the death penalty