An Israeli military court says evidence is "inconclusive" against one of its soldiers who was caught on camera shooting dead a wounded Palestinian.

Lieutenant Colonel Ronen Shor, the judge, said on Tuesday there was "reasonable doubt" about the circumstances of the shooting "given the complexity of the events" surrounding a stabbing incident and the killing that followed.

Shor also ruled that the soldier would be held in custody for two more days. Prosecutors earlier said the shooting was "intentional" and asked the court to extend the soldier's detention until April 7 while the investigation was ongoing. But the judge said he can be held only until Thursday.

READ MORE: UN condemns 'gruesome' killing of wounded Palestinian

The case has sparked anger and political tensions, with many Palestinians saying the shooting of 21-year-old Abed al-Fattah proved their claims that Israel is guilty of using excessive force and carrying out extrajudicial killings.

Fattah and another Palestinian were accused of stabbing an Israeli soldier in the occupied West Bank last week.

During the incident Fattah was shot and wounded, while his partner Ramzi Aziz al-Qasrawi was killed instantly. As Fattah was laying on the ground, an Israeli soldier was captured on camera raising his firearm and shooting him in the head, killing him.

"I'm still taken by surprise by the act of the shooting," Abu Shamsyeh, a Palestinian who witnessed and videotaped the killing, told Al Jazeera.

Shamsyeh said he and his family have received threats after the publication of his video.

The shooting of Fattah has been condemned by the UN as a "gruesome, immoral and unjust act".

Support for soldier

The identity of the 19-year-old soldier and that of his family remained secret under a gag order, granted at the request of his lawyers.

On Tuesday, protesters gathered outside the military court and called for his release.

Far-right politicians have also defended the soldier, and members of his family said he was being publicly "lynched" and would not receive a fair trial.

Ex-foreign minister Avigdor Lieberman, currently a member of the opposition, was among those in court in support of the soldier and to "balance the crude intervention of the prime minister and defence minister" in the process, as he told reporters after the hearing.

"I'm not determining if [the soldier's] conduct was correct or wrong, what's clear is I prefer a soldier who made a mistake and stayed alive over a soldier who hesitates and is murdered by a terrorist," Lieberman said.

About a dozen of the soldier's family members were also in the public gallery, some of them in tears.

Top military brass have condemned his behaviour and Defence Minister Moshe Yaalon pledged the incident would be treated with the "utmost severity".

Prosecutor Lieutenant Colonel Adoram Rigler told the court on Tuesday there were "contradictions" in the soldier's version of events.

"The suspicion emanating from the investigation is that the shooting was carried out intentionally and without need," said Rigler.

Defence lawyers said the Palestinian could have had an explosive device, even though he had reportedly been checked for a suicide belt before the shooting.

Near-daily violence since October has killed 206 Palestinians and 29 Israelis.