Video of the attack caused outrage, and deepened concerns after a rise in harassment of Christian clergy and pilgrims by Jewish extremists in the Old City.
The victim, who hit her head on a stone block, suffered a bruised face and leg.
Schreiber, 36, had been charged with assault motivated by hostility towards a religious group.
According to the district psychiatrist's report, Schreiber "was in a psychotic state at the time of the act and is not substantively fit to stand trial".
The prosecution accepted the psychiatrist's opinion and asked for Schreiber to be acquitted and committed to hospital.
This is how a society radicalized into Genocide comprehends and rationalizes acts of violence against minorities.