The Haifa district court decided to strip Alla Zayud of his citizenship Sunday by applying a 2008 law that allows the interior ministry to deprive of their nationality those involved in "terrorist activities", the sources said.
Adalah, an Arab Israeli rights group, said it was the first court decision of its kind.
The 22-year-old, from Umm al-Fahm in northern Israel, was convicted on four counts of attempted murder after driving a car into Israeli soldiers and stabbing civilians in October 2015.
He was sentenced to 25 years in jail in June 2016.
His mother is an Israeli citizen while his father is a Palestinian with permanent residence in Israel.
Adalah and the Association for Civil Rights in Israel in a joint statement said they would appeal the ruling to the supreme court.
They said the court decision deviated "from the principles of international law, and from the general rule according to which an individual cannot be stripped of (their) citizenship and left stateless".
Arab Israelis are the descendents of Palestinians who remained on their land when the Jewish state was established in 1948.
They number around 1.4 million, some 18 percent of Israel's population.
Since a wave of violence erupted in October 2015, more than 290 Palestinians or Arab Israelis and 47 Israelis have been killed, according to an AFP toll.
Israel says the majority of Palestinians are attackers, though others were killed at protests or during raids. Read more.....
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