A man has been convicted of burning a Palestinian teenager to death after his plea of insanity was thrown out by an Israeli court.

Yosef Haim Ben David faces life in prison for murdering 16-year-old Mohammed Abu Khdeir in July 2014.

A Jerusalem district court ruled that he and two teenagers, who were previously convicted for the killing, kidnapped Abu Khdeir and set him alight in revenge for the murder of three Israeli teenagers in the West Bank.

Mohammed Abu Khdeir was mudered in revenge for the killing of three Israeli teenagers (AFP)

Their deaths and the ensuing violence set off the chain of events leading to that summer’s 50-day Gaza War.

Ben David’s lawyers had launched a last-minute insanity plea but the court found the 30-year-old was responsible for his actions on Tuesday.

Judges determined that he murdered Abu Khdeir for “nationalistic” motives – a term often used to describe hate crimes committed against Palestinians – the Times of Israel reported.

“The court has found that at the time he committed the offence, the accused was not psychotic, fully understood the facts, was responsible for his actions, had no difficulty in understanding reality and had the capacity to prevent the crime,” a spokesperson for Israel’s ministry of justice said, alleging that Ben David had also attempted to kidnap an eight-year-old Palestinian boy on a separate occasion.

Ben David, who called himself “the messiah” at one court hearing, is to be sentenced next month and could face life in prison.

Video: CCTV footage of the suspects

Abu Khdeir's father, Hussein Abu Khdeir, called for life imprisonment and argued that Israeli authorities should destroy the murderer’s house “like they do for all other terrorists”.

Two teenagers involved in the killing were sentenced in February in Jerusalem District Court but cannot be named because of reporting restrictions.

A 17-year-old boy was jailed for life and a 16-year-old received a 21-year sentence.

Abu Khdeir was waiting for friends outside a mosque during morning prayers in Shuafat, East Jerusalem, when he was abducted on 2 July 2014.

Surveillance footage showed him being dragged into a car that drove into Jerusalem Forest, where his burned body was discovered just an hour later.

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An autopsy showed he had soot in his lungs, indicating he had been burned alive after being beaten and forced to swallow petrol by his attackers.

The defendants confessed to carrying out the murder as a brutal act of revenge for the killing of three Jewish teenagers in the West Bank, who had been buried the previous day.

Ben David called out the names of murdered Israelis, including Eyal Yifrah and Naftali Fraenkel as the boys beat Abu Khdeir and hit him in the head with a metal bar, the court heard.

The Israeli Defence Ministry recognized Abu Khdeir as a victim of “hostile action”, granting his family the same compensation rights as the victims of Palestinian attacks, while Prime Minister Benjamin Netanyahu called the murder “despicable”.