Yosef Haim Ben David, 31, was convicted of murdering Mohammad Abu Khdeir, 16, after judges rejected an insanity plea.
Two Israeli youths have also been jailed for their roles in the murder.
Khdeir’s body was discovered in a forest in West Jerusalem on 2 July 2014.
The Jerusalem District Court handed Ben David a life sentence plus 20 years for other crimes on Tuesday, and ordered him to pay 150,000 shekels (£27,000) to the victim’s family.
Hussein Abu Khdeir, the teen’s father, said he wanted to “see him die in prison”, according to the Associated Press news agency.
The court found in November that Ben David had led the kidnapping and murder of Mohammed Abu Khdeir, but postponed a verdict after his lawyer submitted a psychiatric opinion stating his client had not been responsible for his actions.
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Last month, the court officially rejected Ben David’s insanity plea and found him guilty.
His accomplices, who were aged 17 and 16 at the time of the murder, were jailed for life and 21 years in prison respectively in February.
The three kidnapped Mohammad Abu Khdeir as he stood on a road in the Shufat district of East Jerusalem.
The two youths then beat the Palestinian unconscious in the back of a car being driven by Ben David.
One of the Israeli teens helped douse Khdeir with petrol while he was still alive, before Ben David lit a match and set him on fire.
