Shmuel Mett, from Golders Green, north London, was stabbed to death with a kitchen knife two months before he was due to get married in England.
Mr Mett, an ultra-Orthodox rabbinical student at Jerusalem's Mir Yeshiva religious college, was with his close friend Sam Weissbart, 22, also from Golders Green, when the attack happened on David Street. Mr Weissbart, also a yeshiva student, was stabbed but escaped to a nearby police station. He was recovering yesterday in the Shaare Zedek hospital.
David Street, one of the main alleys leading into the heart of the Old City, runs through the Christian Quarter, which is mainly populated by Christian Arabs. But Jews frequently go through it to pray at the Western Wall, Judaism's holiest site, without being attacked or threatened.
Relatives of Mr Weissbart said that a man jumped out at him shouting something he could not understand.
He said that he thought he had been punched before realising that he was bleeding from a wound just above the hip bone. He had not seen what had happened to Mr Mett, whom he had known from childhood.
The murder was caught on one of the many CCTV cameras throughout the Old City and police were reported to be taking a photograph of the assailant round the neighbourhood in an effort to find him. Police said last night that a third yeshiva student, whom they did not identify, had been walking with the two men and had come forward to give information.
The dead man's parents, Percy and Judith, flew immediately to Israel from London for the funeral yesterday evening at the Mir Yeshiva in the ultra orthodox Beit Israel neighbourhood. More than 1,000 yeshiva students and local residents attended the funeral, conducted in Yiddish and Hebrew, along with eminent scholars and leading rabbis attached to the yeshiva. Mir Yeshiva is currently on holiday but is normally attended by 4000 to 5000 students and is one of the leading centres of Talmudic scholarship in world Jewry.
One leading mourner sobbed as he cried out in Yiddish: "Why do the disciples of the wise die when they are so small?"
Mr Mett's fiancée, Dina Rosenfeld, whom he was due to marry in two months, was understood to have remained in London.
Earlier, Daniel Harrington, a 22-year-old American traveller from Spokane, Washington, said he had heard a "commotion" at around 8.30pm on Wednesday and had left the Petra hostel where he was staying to see what had happened. He said that he had been at the scene for about four minutes when the police arrived and started to move people back.
Mr Harrington said the blade appeared to be in Mr Mett's stomach and that there appeared to be blood running from a second wound on his leg. He added: "When I arrived he was still breathing and he had colour, but by the time the police moved me on he was as white as a sheet."
Students at the yeshiva, largely foreigners unable to go home for the August break, were among demonstrators on Wednesday evening at the Hadassah Ein Karem hospital where Mr Mett had been taken, protesting at reported police plans to hold an autopsy, which ultra-Orthodox Jews regard as forbidden by their religion.
In the face of the protests - and the resistance of Mr Mett's sister, who lives in Israel - police announced yesterday morning that they would not be holding an autopsy but instead there would be a "visual inspection" of Mr Mett's wounds by a doctor approved by the dead man's family.
At the yeshiva, fellow students, who declined to give their names, spoke of Mr Mett as a "smiley, quiet, boy who was very serious about studies". One student, also from Golders Green, said: "Shmuel was one of those people who was impossible to dislike. This is a tragic, tragic thing." The student said that both Mr Mett and Mr Weissbart had regularly attended the Hagers synagogue in Golders Green.
One family friend, who asked for his name not to be used, said: "Sam couldn't sleep last night. He said that when he shut his eyes he saw the man jumping out at him shouting."
One of Mr Weissbart's cousins Noah Feld, said both men - who had been friends since attending Pardes House school in Golders Green and had been at the Gateshead Yeshiva before coming to Israel - "wouldn't hurt a fly. They were gentle, special people".
Mr Feld said Mr Weissbart had managed to reach the police station at the Armenian quarter about 300 yards from where the attack took place in David Street, where a small group of ultra-Orthodox mourners gathered to pray yesterday afternoon.
Yoram Halevy, commander of the Old City's police station, said a Palestinian carried out the stabbings. Police said the attack was "nationally" motivated.