Abir Aramin, 10, was killed by a rubber bullet fired by an Israeli border police officer as she went to buy sweets in 2007

The family of a 10-year-old Palestinian girl killed by a rubber bullet as she went to buy sweets has been has been awarded $430,000 (£277,000) compensation by an Israeli court.

Despite a civil court ruling 13 months ago that Abir Aramin was fatally wounded in January 2007 by a round fired by an Israeli border police officer, no one has been brought to trial. The Israeli authorities initially insisted Abir had been hit by a stone thrown by Palestinian protesters.

The Jerusalem district court ruled on Sunday that the state of Israel was responsible for the child's death and must pay compensation for "lost years", the circumstances of her death and for burial expenses. Judge Orit Efal-Gabai said there was no doubt the bullet that struck Abir was fired in violation of orders.

Abir was killed as she, her sister and two friends went to buy sweets following a maths exam at their school in Anata, near Jerusalem on the West Bank side of the separation wall. According to the testimony of witnesses, an Israeli border police vehicle drew up and a group of boys threw stones at it.

Abir was hit and, bleeding heavily from a head wound, was taken to hospital. She died two days later. Police investigators closed the file saying there was no evidence she had been killed by a rubber bullet, despite witness accounts.

Her family brought a civil case and in August last year the judge ruled that Abir's death was "totally unjustifiable" and that border guards had either been negligent or had disobeyed instructions.

Abir's father, Bassam Aramin, said at the time of that case that he could not blame an "18-year-old boy for shooting an innocent 10-year-old girl", but he held Israeli government policies to blame.

Aramin spent seven years in prison for militant activity, during which he renounced violence. "I learned that with dialogue you can change the minds of extremists, but that just fighting brings only a cycle of action and reaction," he told the Guardian in 2007.

He later helped to found Combatants for Peace, an organisation of former Palestinian militants and former Israeli soldiers which campaigns for an end to the Israeli occupation.

Following Sunday's court ruling, his family's lawyer told the Ynet news website: "We are happy that justice has come to light and are still working to award the family compensation for all the suffering it has gone through. [Aramin] is a peace activist whose attitude has not changed since the incident. That is one positive aspect of this story."