The head of the military court's three-judge panel read out the manslaughter indictment to Elor Azaria, who was clad in his uniform and surrounded by family in the cramped courtroom, an AFP journalist said.
The 19-year-old soldier also faces charges of conduct unbecoming before the court in Jaffa, just south of Tel Aviv.
He stated his military ID number and said "I do" when asked if he understood the charges.
Azaria, who also holds French citizenship, shot dead the 21-year-old Palestinian on March 24 in the city of Hebron, in the south of the occupied West Bank.
In a video that was widely circulated following the incident, the Palestinian Abdul Fatah al-Sharif is shown lying on the ground along with another man after being shot and wounded. He had minutes earlier allegedly stabbed and moderately wounded a soldier, according to the army.
Azaria, who was not at the scene during the alleged attack, then appears in the footage and is seen shooting Sharif in the head without any apparent provocation.
The incident came amid a wave of unrest that erupted in October and has so far killed 203 Palestinians and 28 Israelis.
Most of the Palestinians killed were carrying out knife, gun or car-ramming attacks, Israeli authorities say.
Monday's hearing lasted only an hour, with the judges agreeing to a defence request for more time to prepare the case. They also refused a plea to allow the defendant release from his detention for Israeli Independence Day, celebrated this Thursday.
Azaria, who is being detained in a military base during legal procedures, had been granted a weekend last month to celebrate Passover with his family.
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The court will hold the next session on May 23.
The case has garnered widespread attention and sparked debate in Israel over a rare case of a soldier being charged with killing an assailant, even if he no longer posed a threat.
- 'Fingerprints of meddling' -
Azaria's defence team, who say he thought the Palestinian was wearing explosives, said on Monday the trial was tainted by a politicised attempt to produce a conviction.
"We can see crude fingerprints of the highest echelons meddling in the legal process by the means of giving orders to the prosecutors. The prosecution in this case is not independent,” attorney Ilan Katz told reporters.
The prosecution, however, stood by the allegation that Azaria acted in severe breach of protocol, reflecting remarks by Israel's military chief as well as the defence minister.
"This trial is about an abnormally severe issue from our perspective –- the operationally unjustifiable shooting of a terrorist, who had already been neutralised, in violation of all rules of engagement," prosecutor Nadav Weissman said.
The top brass of the Israeli military have condemned his actions, but rightwing politicians have argued that he has been unfairly treated.
Thousands of people attended a controversial rally in support of Azaria last month.
If Azaria were convicted of manslaughter in the military court, it would be the first time for an Israeli serviceman since 2004, when a soldier was sentenced to eight years in prison for killing British national Tom Hurndall, of the pro-Palestinian International Solidarity Movement.
According to Israeli NGO Yesh Din, since 2000 there have been 262 military investigations into Palestinian fatalities, with 22 soldiers charged with offences relating to deaths.