An Israeli court on Monday convicted a Jewish settler on three counts of murder over a 2015 arson attack that killed a Palestinian toddler and his parents.

Amiram Ben-Uliel, 25, from the West Bank settlement of Shilo, was also found guilty of two counts each of attempted murder and arson, along with conspiracy to commit a hate crime, a court statement said.

The court did not set a date for sentencing on the charges which under Israeli law carry a maximum term of life in jail.

The verdict comes a day after Prime Minister Benjamin Netanyahu said Israel's new government should push ahead with annexing Jewish settlements in the occupied West Bank, a move likely to further inflame tensions in the territory.

Amiram Ben-Uliel, a Jewish settler, was found guilty of having committed an arson attack that killed a Palestinian toddler and his parents
Amiram Ben-Uliel, a Jewish settler, was found guilty of having committed an arson attack that killed a Palestinian toddler and his parents POOL / Avshalom SASSONI

Ben-Uliel's defence team said it had notified the Supreme Court that it would lodge an appeal.

The firebomb attack in the occupied West Bank village of Duma killed 18-month-old Ali Saad Dawabsha and fatally wounded his mother and father.

His brother Ahmed, aged four at the time, was the sole survivor from the immediate family and escaped with severe burns.

A prosecution statement after the verdict said the "horrific terror attack in Duma" was a premeditated act of revenge for the fatal shooting of settler Malachi Rosenfeld by a Palestinian near Shilo a month earlier.

A picture from 2016 of then five-year-old Ahmed Dawabsha (L), a Palestinian boy who survived the firebombing targeting his family home that killed his parents and brother
A picture from 2016 of then five-year-old Ahmed Dawabsha (L), a Palestinian boy who survived the firebombing targeting his family home that killed his parents and brother AFP / JAAFAR ASHTIYEH

"The court found that the accused planned the attack in advance, equipped himself with two petrol bombs and threw one in the middle of the night through the window of the bedroom where the Dawabsha family was sleeping at the time," it said.

During the investigation he had confessed to carrying out the attack, given details not known to the public and reconstructed the incident, it added.

Ben-Uliel refused to testify at his trial and his lawyer sought to disqualify the confession and other prosecution evidence which he said Shin Bet security service interrogators had extracted by force.

The court ruled that the evidence was admissible but defence lawyer Asher Ohayon continued to argue that it should be given little weight.

"This was testimony given after continuous torture for three weeks," he claimed in an interview with Israeli public radio on Monday, ahead of the verdict.

An Israeli court convicted Ben-Uliel of three counts of murder, two counts each of attempted murder and arson, and conspiracy to commit a hate crime
An Israeli court convicted Ben-Uliel of three counts of murder, two counts each of attempted murder and arson, and conspiracy to commit a hate crime POOL / Avshalom SASSONI

Afterwards, the defence team in a statement condemned "a black day for the state of Israel. A day on which an Israeli court set its hand to convicting a man whose innocence cries out to the heavens."

Ahmed's uncle, Nasser Dawabsha, told AFP outside the courtroom in Lod, central Israel, that he believed Ben-Uliel did not act alone and that others were escaping justice.

"We are sure that more than one person burned the house," he said. "We are afraid now that we will be subjected to revenge from the other people who took part."

The court last May in a separate case accepted a plea bargain in which a young Israeli confessed to a racially motivated conspiracy to commit a crime and vandalism.

In October it convicted the same man of membership in the so-called "hilltop youth", a loosely affiliated group of Jewish extremists who the court said had sought "to instil fear among Arabs while damaging their property and risking lives".

He has not been named since he was 17 at the time of the arson killings and was tried as a minor.

The youth had admitted to staking out the village ahead of the attack along with Ben-Uliel, but was said not to have participated in it.

Ben Uliel was aged 21 when he was charged in January 2016.

Monday's court ruling cleared him of "membership of a terror organisation".

The murders drew renewed attention to Jewish extremism and sparked accusations Israel has not done enough to prevent such violence.

Netanyahu has labelled them acts of "terrorism", a word more commonly used by Israelis to refer to violence committed by Palestinians.