Tristan Anderson of Oakland, California, was critically injured in March 2009 when police hit him with a tear gas canister during a protest against Israel's West Bank separation barrier.
The Justice Ministry closed the case earlier this year after a police found that there had been no criminal intent to harm Anderson.
But Anderson's Israeli attorneys filed an appeal, alleging grave flaws in the investigation.
On Thursday, Justice Ministry spokesman Ron Roman said police have been asked to investigate selected aspects of the case.
Anderson, who suffered brain damage, left an Israeli hospital earlier this month to return to the U.S.