An Israeli court on Wednesday found a US-born Jewish settler guilty of murdering two Palestinians and convicted him on two counts of attempted murder.

Jack Teitel, a 41-year-old extreme right religious activist, was found guilty of the killings in 1997 of a bus driver and a shepherd, both Palestinians.

He was also found guilty of two attempted murders, making and illegally possessing weapons and incitement to violence, according to the Jerusalem district court decision, a copy of which was seen by AFP.

The court ruled that Teitel was mentally competent when the offences he was accused of were carried out, and rejected defence lawyers' arguments that their client had not been mentally stable and was therefore not guilty.

Teitel, who lived in the Shvut Rachel settlement in the West Bank, had been branded by the Israeli popular press as a "Jewish terrorist."

He said he carried out a bomb attack in 2008 on the home of leading leftwing Israeli professor Zeev Sternhell, wounding him.

He also admitted sending a parcel bomb to a couple belonging to a Jewish sect that embraces Jesus, wounding their 15-year-old son.

Teitel, who immigrated from the United States, was also known for his hate of homosexuality, calling for the murder of "sodomites."