The family had initially asked medical staff to fertilise the eggs with donated sperm, giving the eggs a better chance of survival, but the court refused, the Israeli newspaper Haaretz reported.
Despite the Ayish family's change of heart, the case will be viewed as an important legal advance for families seeking continuity from their deceased partners and children.
"It's revolutionary ... It's great that people have a chance to decide," said Irit Rosenblum, a lawyer who founded New Family, an organisation advancing family rights.
In line with rulings in Britain and elsewhere, the courts have allowed the use of sperm from deceased males but the permission has not applied to women, where the harvesting of eggs involves a more complicated procedure.
There has been at least one case in Israel where the husband of a woman who died from cancer won legal permission to use the embryos of his late wife, created during efforts to conceive through IVF.
He now has a child.
Cases where families have sought to use the sperm of dead males are more common, though.
Earlier this year, the parents of an Israeli man killed in an accident sought legal permission to use his frozen sperm.
The case was unusual, because according to a 2003 ruling by Israel's attorney general, only a wife or girlfriend could use the sperm of a dead man.
- INDEPENDENT