The 21-year-old attacker, Abdel Fattah al-Sharif, was shot and wounded after he and an accomplice stabbed and wounded an Israeli soldier in the incident in Hebron in March last year.
As he lay on the ground, Sergeant Elor Azaria, who arrived on the scene 11 minutes later, shot him in the head.
The killing was captured on video and widely shared by human rights activists.
The controversial trial has dragged on for months, focusing on Sgt Azaria’s mental state at the time – and the extent to which the judges found him to be acting out of self-defence or revenge. In the process, it has polarised Israeli society. There have been widespread protests and fund-raising concerts calling for the charges to be dropped in the last 10 months.
Prime Minister Benjamin Netanyahu even took the unusual step of calling the sergeant’s family after he was arrested to offer his sympathies.
Hundreds of demonstrators gathered outside the court on Wednesday awaiting the trial’s verdict, with crowds calling on the Israel Defence Force (IDF) and government to defend the soldier’s actions which “kept Israel safe.”
But in a damning verdict which dismissed the defence case, Justice Maya Heller said that Sgt Azaria was “aware” that his actions in shooting the wounded Palestinian assailant would result in loss of life, and that “the terrorist did not pose a threat.”
The IDF medic, now 20, did not act in accordance with army protocol, the three-judge panel found, and the claim that he felt threatened because al-Sharif may have been carrying explosives or still been able to reach for his knife was not justified.
“One cannot use this type of force, even if we're talking about an enemy's life,” the court said in its verdict.
Sgt Azaria remained emotionless as the chief judge read out the conviction, but his mother screamed “you should be ashamed of yourselves” as the panel left the bench.
Manslaughter carries a prison sentence of up to 20 years under Israeli law. Sgt Azaria will be sentenced on a later date and can appeal both the conviction and sentence to the Military Appeals Court.
Hundreds of protesters supportive of the soldier’s case waiting outside the court appeared deflated by the decision, which makes Sgt Azaria the first member of the IDF to be convicted of the charge in 12 years.
More than 150 Palestinians have been fatally shot on suspicion of carrying out terrorist attacks since October 2015, Human Rights Watch (HRW) noted.
“Today’s conviction is a positive step toward reining in excessive use of force by Israeli soldiers against Palestinians,” said Sari Bashi, the organisation’s Israel advocacy director.
Before the verdict was handed down there were already calls to pardon the 20-year-old, including from high level politicians such as Justice Minister Ayelet Shaked and Education Minister Naftali Bennett.
Defence Minister Avigdor Lieberman described the decision as a “tough verdict” but called on those who did not like it to “respect the ruling and keep the peace.”
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