The man - named as 23-year-old Othman Said Kianiya - was arrested last month along with two other Arab residents of East Jerusalem who have already been charged.
All three were alleged to be working on behalf of the militant group Hamas.
Police claim the group was planning to poison drinks at the Cafe Rimon with drugs, which in large doses could prove fatal.
As part of the alleged scheme, the drugs were first being tested on cats.
'No suspicions'
The other men - 23-year-old Sufian Bakri Abdu and 22-year-old Moussa Mohammed - were charged with making contact with Hamas and collecting information on how to poison food and make a suicide bomb belt.
Neither submitted a plea. Prosecutors said the group got in touch with Hamas via the internet and received orders for terror attacks as well as recipes for poison.
"I didn't do anything ... They didn't find any substance", Mr Kianiya told reporters in court on Sunday.
Police said they made the arrests after one of the accused visited a chemist's to buy a packet of the heart drug Digoxin.
The drug is colourless, odourless and tasteless when dissolved in fluid and gives the impression that the victim has died of a natural heart attack, the indictment said.
The owner of Café Rimon, a popular restaurant in the city centre, said he had had no reason to suspect his staff.
"We had checked and asked about the workers but no-one saw any problems with them," he told Israeli radio, adding that he had imagined other forms of attack but not poison.