The body of international student Aya Maasarwe has been buried during a funeral service in Israel.

The service took place in her home town of Baqu al Gharbiyye, a Palestinian city one hour north of Tel Aviv, where her family and community members paid their last respects.

After landing from Australia, her coffin was transported to the local mosque, where prayers were held for her.

Cars jammed the streets, many displaying black flags in mourning for Ms Maasarwe, whose family has requested for her to be referred to as Aya instead of Aiia to reflect her Palestinian heritage.

After prayers, Maasarwe’s coffin was carried out by close family members draped in silver cloth and lowered into the ground just after 11am local time (8pm AEDT).

“It is a very tragedy for all the family because we never thought or accept think about this thing will happen to Aya,” her uncle, Ahmad Masarwi, said.

“So for us, it is very difficult and very hard, our heart is broken.”

Mourners also gathered along the sandstone walls of Ms Maasarwe’s old school in Baqa Al-Gharbiyye, as relatives and neighbours filed into her family’s home to offer condolences.

Near the family’s front gate in the close-knit Arab town, relatives and neighbours had hung signs in Arabic saying “stop picking our flowers”. The family said that was a reference to violence against young women. Municipal offices shut down for the day.

Abed Katane, another uncle, said she had chosen the university “because she’d never heard any problems about Melbourne” or other Australian cities.

“She had to decide between New York and Melbourne, and called me to ask what I think,” he said.

“We both felt that Australia is more quiet, and its people more well-behaved. Our opinion turned out for the worse.”

Mr Maasarwe’s death has shocked the densely populated community which lies next to the Israeli-occupied West Bank. Its 30,000 residents are members of Israel’s Arab minority.

She was killed while walking home after a night out with friends in North Melbourne. A student at Shanghai University, she had been on a six-month exchange program at La Trobe University.

Her body was found by passersby early on January 16, near the university’s Bundoora campus.

Codey Herrmann, 20, has been charged with Ms Maasarwe’s rape and murder.