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.
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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.
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.
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.
"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.