Yunis Madani, 28, from the village of Taibeh in the Galilee, left Israel in January without informing his family. He later contacted them from Syria to inform them that he had joined Islamic State (also known as ISIS and ISIL).
His father said on Friday that he had received a telephone call the previous day informing him that Yunis had been critically wounded in the fighting for Palmyra and had later died.
ISIS captured the town on Thursday after several days of heavy fighting against Syrian government forces. In addition to its magnificent ruins that date back 2,000 years, Palmyra is regarded as a strategic location in the battle for Syria.
Madani leaves behind him a wife and three children, the youngest a 2-week-old daughter.
His family said there had been no indication that their son, a building contractor, had intended to leave his family and join ISIS. "We didn't have a clue why he decided to do it and we very much wanted him to return to his Family," Yunis father, Abed el-Kadr Madani, said. "But now, everything is lost."
Madani is not the first Arab Israeli to die while fighting for ISIS. At least five other youths, from Taibeh, Nazareth, Iksal and the Negev, have also lost their lives while fighting for the extremist Islamic group.
According to media reports, dozens of Arab Israeli youths have left Israel in recent years for Turkey and then onwards to Syria or Iraq. Some are still with ISIS, while others have returned to Israel, where they are arrested and tried for belonging to a terror organization.
With its conquest of Palmyra, ISIS now controls over half of Syria.
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