Palo Alto Networks, PAN-OS® Administrator's Guide 11.0, "URL Filtering Concepts," Section: "Order of Operations for URL Filtering."
This guide details the sequence in which the firewall evaluates URLs, noting the initial checks against custom categories configured with block and allow actions before proceeding to external lists and the PAN-DB database.
Palo Alto Networks, PCNSE Study Guide for PAN-OS 10.0, Chapter 5: "URL Filtering," pp. 213-214.
The official study guide confirms this hierarchy, stating, "The firewall checks the URL against the allow list and the block list... The block list has higher priority." It then describes checking custom categories, external dynamic lists, and finally the PAN-DB lookup (on-box then cloud).
Palo Alto Networks Knowledge Base, Article ID 2593, "URL Filtering Block and Allow List Behavior"
This document explicitly states: "The block list has a higher priority than the allow list. If a URL is on both the allow list and the block list, the URL will be blocked." This supports the placement of the Block List at the top of the processing order.