Amiram Ben-Uliel, 25, from the West Bank settlement of Shilo, was also convicted of two counts each of attempted murder and arson, along with conspiracy to commit a hate crime in the 2015 attack.
The court did not set a date for sentencing on the charges, which carry a maximum term of life in jail, and the defence team announced an appeal.
Hours after the verdict, the Palestinian family devastated by the attack told AFP that justice was incomplete, having long insisted that there were several attackers.
Ahmed Dawabsha was four when his parents and brother were killed by Ben-Uliel, who threw a firebomb through a window of their home while they slept in Duma, a village in the occupied West Bank. He was severely burned.
When told by his grandfather that a man had been convicted of the murders, nine-year-old Ahmed cried out, "just one!"
The 2015 killings shone a spotlight on Jewish extremism and sparked accusations Israel had not done enough to prevent such violence.
Prime Minister Benjamin Netanyahu has labelled such attacks acts of "terrorism", a word more commonly used by Israelis to refer to violence committed by Palestinians.
The verdict came a day after Netanyahu said Israel's new government should push ahead with annexing West Bank Jewish settlements, a move likely to further inflame tensions in the territory.
- 'Horrific terror attack' -
Ahmed, who suffered severe burns, was the sole survivor in his immediate family of the arson attack that killed his 18-month-old brother Ali, his mother Riham and father Saed.
After the verdict, the prosecution described the "horrific terror attack in Duma" as a premeditated act of revenge for the fatal shooting of settler Malachi Rosenfeld by a Palestinian near Shilo a month earlier.
"The court found that the accused planned the attack in advance, equipped himself with two petrol bombs and threw one in the middle of the night through the window of the bedroom where the Dawabsha family was sleeping at the time," it said.
During the investigation Ben-Uliel had confessed to the attack, given details not known to the public and reconstructed the incident, it added.
Ben-Uliel refused to testify at his trial and his lawyer sought to disqualify the confession and other prosecution evidence which he said Shin Bet security service interrogators had extracted by force.
The court ruled the evidence was admissible but defence lawyer Asher Ohayon sought to undermine it.
"This was testimony given after continuous torture for three weeks," he told Israeli public radio before Monday's verdict.
The defence team later condemned "a black day for the state of Israel" and charged that the court had convicted a man "whose innocence cries out to the heavens".
- No celebration -
The Dawabsha family's one-storey house remains the charred ruin it was after the fire, with a small poster showing the family stuck on one wall.
Furniture is burned out and a blackened child's bike lies on the floor.
"Any time I come into this house I relive the moment when it was burned down," said Ahmed's uncle, Nasser Dawabsha, gesturing at the rubble.
He insisted Ben-Uliel's accomplices had escaped justice, telling AFP that "the decision for us is incomplete".
"After five years of deliberations and more than 70 court sessions, today they convicted one person -- witnesses saw more than one."
Israel last May accepted a plea bargain in which a young Israeli confessed to a racially motivated conspiracy to commit a crime and vandalism.
It later convicted the same man of membership in the "hilltop youth", a loosely affiliated group of Jewish extremists who the court said had sought "to instil fear among Arabs while damaging their property and risking lives".
He has not been named as he was 17 at the time of the arson killings and tried as a minor.
The youth had admitted to staking out Duma ahead of the attack with Ben-Uliel, but was said not to have participated in it.
When Ahmed's grandfather Hussein sat him down to explain what had happened at court, Hussein said the conviction was no cause for celebration as "it won't bring back Saed, Riham and Ali".
"For the last five years we haven't been living."
Reference: Yahoo News
