The man, Ari Fuld, was a right-wing pro-Israel activist who had a following on social media.
The campaign began as near-daily attacks against Israelis but has since decreased significantly.
During last year's march by right-wing Israelis through East Jerusalem's Old City to mark 50 years since Israel seized control of it in the Six-Day War, Fuld said it was a "miraculous day" for Jews.
The portion of the money involving Palestinians in the occupied West Bank and Gaza Strip was being redirected to programmes between Jewish and Arab Israelis, a United States embassy official said.
The military said the attacker arrived at the mall near a major junction in the southern West Bank, close to the Gush Etzion settlement bloc, and stabbed the Fuld before fleeing.
Firmino eases Liverpool supporters’ worries with latest update
Liverpool , by contrast, spent more than $220 million on refreshing the squad and is now enjoying its best start since 1990. But Spurs were far from impressive and deserved to take nothing from this game.
Abdulatif al-Qanou'a, Hamas spokesman in Gaza, said in a statement that the "Great March of Return" rally will continue until it achieves its goals. Meanwhile, the other Israeli settler suffered serious injuries.
U.S. officials also could not confirm whether the latest cut meant all non-security related aid to the Palestinians had now been eliminated. "If that meant 30 days of Facebook jail, so be it".
Israeli Prime Minister Benjamin Netanyahu paid a condolence visit to Fuld's family and wrote on Twitter: "I embraced them on behalf of all the people of Israel during their time of bad sorrow".
On Twitter, David Friedman, the US ambassador to Israel and a strong supporter of the settlements, called him "a passionate defender of Israel & an American patriot".
According to him, Chadi was hit by a tear gas canister fired by israeli soldiers and collapsed immediately.
At least three Palestinians were killed and hundreds injured on Friday afternoon during clashes with Israeli soldiers on the border between eastern Gaza Strip and Israel, the Gaza Health Ministry said.