A court in the Hague ruled the case could proceed, dismissing pleas by public prosecutors that it should be dropped after the United Nations invoked its legal immunity and said it would not take part.
"The U.N. has the duty to prevent genocide. An appeal to immunity in a case of genocide, as in the Srebrenica drama, is irreconcilable with the U.N.'s own objectives and its international obligations," he added in a statement.
Victims' families launched the suit against the Netherlands and the U.N. in July, arguing the Dutch were to blame for the massacre because they refused crucial air support to their own troops defending the Bosnian town.
Lightly armed Dutch soldiers were forced to abandon the enclave to Bosnian Serb forces who took away and massacred Muslim men and boys who had relied on protection from the Dutch troops, their families say.
Former Bosnian Serb leader Radovan Karadzic and former Bosnian Serb Army chief Ratko Mladic, both wanted by the U.N. war crimes tribunal in The Hague on genocide charges over Srebrenica, are still on the run.
The Dutch state has always said its troops were abandoned by the U.N. which gave them no air support, but public documents show a network of Dutch military officials within the U.N. blocked air support because they feared their soldiers could be hit by friendly fire, the families' lawyers said.