An Israeli soldier caught on video fatally shooting a wounded Palestinian as he lay on the ground will now face a charge of manslaughter rather than murder.

The prosecutors' decision on Thursday comes a day after the UN said the killing of Abed al-Fattah Yusri al-Sharif, 21, exhibited all the signs of an extrajudicial execution.

Footage of the incident showed the Israeli soldier step forward and shoot the Palestinian in the head at close range as he lay motionless on the ground.

West Bank shooting: 'Israel does whatever it wants'

"[We are] hearing that the prosecutor has now downgraded the potential charge from murder - which is an extremely rare charge to be levelled against any member of the Israeli army - to manslaughter," Al Jazeera's Stefanie Dekker, reporting from West Jerusalem, said.

Under Israeli law, manslaughter signifies an intentional but not premeditated killing.

Prosecutors sought to extend the remand in military prison of the soldier, who was arrested after the March 24 shooting.

The court ruled that he should instead be confined to barracks without being locked up but after the prosecution objected, the judge ordered another hearing for Friday.

"Due to this, the soldier will remain in detention until the conclusion of tomorrow's deliberations," an army spokeswoman told the AFP news agency.

Fattah and another man, who was earlier shot and killed, were accused of stabbing an Israeli soldier in Hebron.

Military prosecutors said on Thursday the Israeli soldier opened fire "with intent and with no operational need" in Fattah's killing, Israeli radio reported.

Palestinian activists in Hebron have demanded that Israel holds its army accountable for Fattah's killing.

Meanwhile, hundreds of nationalist Israelis, some wrapped in Israeli flags, have demonstrated in support of the soldier outside the military court near the southern Israeli town of Kiryat Malachi.

They included opposition politician Avigdor Lieberman, who told the crowd on Tuesday: "I prefer a soldier who made a mistake but is still alive, over a dead soldier who hesitated."

On Wednesday, Christof Heyns, the UN's special rapporteur on extrajudicial, summary or arbitrary executions, said: "Whatever legal regime one applies to the case, shooting someone who is no longer a threat is murder."