Jennings, a 34-year-old Iraq war veteran, has already been tried twice, but both ended with deadlocked juries.
Last month, a jury deadlocked 11-1 in favor of a conviction, and last year, a different jury was deadlocked 9-3, also for conviction.
The defense had asked the judge to dismiss the case following the latest jury's deadlock.
L.A. Superior Court Judge Michael Johnson's decision allows the prosecution to proceed with what the judge says will "undoubtedly be the final trial" for Jennings.
Jennings, who served in Iraq with the National Guard, has been jailed since his Dec. 13, 2005, arrest.
He is accused of murdering O'Keefe after she returned to a parking lot after carpooling with a friend to a Kid Rock video shoot in Los Angeles, where both worked as paid extras. O'Keefe was found shot four times in her Ford Mustang. Jennings was the security guard working the lot the night of the murder.
He was visibly upset when the judge handed down his decision.
The third trial may move to Lancaster from downtown Los Angeles.
The family of the victim was frustrated because they thought they would get a conviction this time, but said they were ready to go through the trial again.
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