Sheinbein, 18, fled to Israel three days after the mutilated corpse of his former friend, 19-year-old Alfred Tello, was found in September 1997.
Another suspect in the murder, Aaron Benjamin Needle, 18, hanged himself in his jail cell following his arrest.
Needle and Sheinbein were classmates at the Charles E. Smith Jewish Day School in suburban Washington.
After his arrival in Israel, Sheinbein successfully fought extradition to the United States, claiming Israeli citizenship through his father, who was born in pre-state Palestine and left as a child.
American calls for extradition came from the highest levels. Secretary of State Madeleine Albright was personally involved in urging Israel to hand him over.
Israeli prosecutor Hadassah Naor said Monday that Sheinbein would be tried based on Israeli law.
“The court cannot sentence him to anything more severe than what he would be given in the United States, where the crime was committed,” she said.
If convicted, Sheinbein faces life in an Israeli prison.
Naor said that had Sheinbein been tried in the United States, prosecutors there would not have sought the death penalty because he was a minor at the time of the murder.
Dozens of witnesses, including FBI investigators, are expected to be flown to Israel from the United States to testify at the trial.
Sheinbein’s Israeli lawyer, David Libai, said it is unlikely prosecutors will agree to a plea bargain, given the high profile of the case.
“In light of the political and emotional sensitivities this case raises, I don’t see a real possibility that prosecutors will concede on anything or compromise on anything,” Libai told reporters.
He did not state how his client would plead.
At Monday’s hearing, Sheinbein was ordered held until April 19, when the court is scheduled to hear a prosecution request to keep him in jail until the trial’s end.