Shalom Yohai Sherki, 25, of Jerusalem, died in hospital on Thursday morning after being struck by a car on Wednesday night.
Shira Klein, 20, who was injured in the same incident, is hospitalized in a serious but stable condition.
The Israel Police reported on Thursday that the driver of the car, a 37-year-old Palestinian from Anta, was being held for questioning. The suspicion is increasing among the police that the incident was a terror attack, rather than an accident.
Thousands of people attended Sherki's burial in Jerusalem's Givat Shaul cemetery on Thursday. "The Holocaust was in the foreground of your consciousness. It's not by chance that you were separated from us on Holocaust Remembrance Day," Rabbi Uri Sherki said in his eulogy to his son.
"Our family didn't wander for two thousand years and return to Israel to be murdered but to be planted We need to be strong, both in our private work and in the work of the government, which will know how to appropriately plant the people of Israel in its land."
Sherki and Klein were injured on Wednesday night when a car drove into them while they were standing at a bus stop in Jerusalem's French Hill neighborhood.
The Palestinian driver and his passenger were lightly injured. Sherki and Klein were evacuated in serious condition to Hadassah University Hospital in Ein Karem.
Jerusalem Mayor Nir Barkat arrived at the scene Wednesday night along with heavy police forces and emergency crew.
The incident occurred on Route 1, not far from some of the car ramming attacks in Jerusalem in recent months.
Seven people, including four Border Police officers, were wounded last month when a Palestinian man plowed his car onto the sidewalk and into a group of pedestrians at a light-rail station in northern Jerusalem, in a presumed terror attack targeting Israeli Jews. The assailant then got out of his car, holding a knife, and was shot and critically wounded by police and security officers.
Earlier on Wednesday a 59-year-old woman was moderately injured in a car accident in Rishon Letzion and two other people suffered serious and moderate wounds in an accident near Ramle.
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