A court in Jerusalem convicted Asher Weisgan of murder, attempted murder and serious attempt to harm, the prosecution said. He will reportedly be sentenced next week.
Weisgan, a driver, had taken a group of Palestinian workers to their jobs in Shiloh, a West Bank settlement, before snatching a rifle from a security guard and opening fire, killing two of them.
He then began shooting on other Palestinian labourers in the settlement's industrial park, killing two more before he was overpowered by the settlement's security guards.
Prosecutors said Weisgan had hoped the attack would stop the Gaza withdrawal, which had begun two days earlier.
Convictions of Israelis for crimes committed in the West Bank are rare, and an Israeli human rights group said on Monday that up to 90% of cases brought by Palestinians against Israeli settlers end in failure, with files lost or closed for lack of evidence.
'Act of terror'
Weisgan said after the attack that he was not sorry for what he had done and that he hoped Ariel Sharon, the Israeli prime minister at the time of the incident, would also be killed.
Sharon condemned Weisgan's attack at the time as a "Jewish act of terror".
The incident stunned many in Israel when it emerged that Weisgan had worked with the first two Palestinians he killed for years, and that they had considered him to be a good friend.
It also took place two weeks after a Jewish extremist killed four Israeli Arabs on a bus in northern Israel before being lynched by an crowd.
Israel completed the withdrawal of its troops and more than 8,500 settlers from Gaza in mid-September 2005, ending more than 38 years of occupation.