Haim Pitoussi, spokesman of the National Insurance Institute which administers the memorial wall in Jerusalem's Mount Herzl national cemetery, confirmed that the name of Mohammed Abu Khder, 16, had been erased.
Speaking to AFP yesterday after the inscription, his father, Hussein Abu Khder, said his son's name had been placed on the memorial without the family's consent.
"I am Palestinian, not Israeli, even if I am a resident of east Jerusalem, and I do not want his name written next to that of Israeli soldiers," he said.
Israel was on Wednesday marking its annual day of remembrance for both groups, with official ceremonies being held across the country.
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Israel's leaders were to attend central ceremonies at Mount Herzl.
The commemoration for soldiers is at 0800 GMT and that for civilians two hours later.
Abu Khder was kidnapped from annexed east Jerusalem on July 2 and his burned body was found hours later in a forest in the western part of the city.
He was allegedly killed by three Jewish extremists in revenge weeks after the kidnap and murder of three Israeli teenagers by Palestinian militants in the southern West Bank.
Although a number of Arab names are featured on the wall, it was believed to be the first time the name of a Palestinian killed by Jewish Israelis had been listed.
The vast majority of the names are of Jewish Israelis killed in attacks carried out by Palestinian militants.