The verdict is "shocking and unfair," Abu Huzeifa, a spokesman for the Mujahideen Brigades, told a Thursday press conference in Gaza City.
"We don't interfere in the domestic affairs of Arab countries, especially Egypt, and we call on the Egyptian authorities and people to reject the ruling," Abu Huzeifa said as he read out a statement from Palestinian factions.
"This ruling is a major prize for Israel and serves the interests of the enemies of the Palestinian people," he added.
The conference was attended by representatives of several armed factions in the Palestinian enclave, including the Qassam Brigades and the Fatah-linked Al-Aqsa Martyrs Brigades.
An Egyptian court on Saturday branded the Qassam Brigades a "terrorist organization" after an Egyptian lawyer filed a lawsuit claiming that it was involved in recent attacks on Egyptian army sites in the Sinai Peninsula, which shares borders with the Gaza Strip.
The verdict came two days after scores of people were killed and injured in a spate of militant attacks on security and military sites in the northern Sinai Peninsula.
Egyptian security forces have been waging a campaign against militants in Sinai amid a rise in attacks on army and police personnel since the ouster of elected President Mohamed Morsi in mid-2013.
The Egyptian media accuses Hamas, an ideological offshoot of the Muslim Brotherhood – the group from which Morsi hails – of standing behind the violence in Sinai.
The Palestinian faction has, however, repeatedly denied the accusations, saying it cannot act against Egypt's national security.