Tel Aviv District Court rejected Yona Avrushmi's request for early release from prison for the third time on Thursday.
Avrushmi was given a life sentence in 1984 for killing Peace Now activist Emile Greenzweig and wounding nine others during a demonstration in Jerusalem in 2002.
The parole committee reached the conclusion that Avrushmi's behavior had not changed significantly, and he did not cooperate with the mental rehabilitation efforts he was offered.
His sentence was reduced to 27 years by former president Ezer Weizman.
A parole committee nearly released him last year, until they found he allegedly used drugs. Avrushmi appealed his case two more times since then.