The Hoops defender has to enter a 13-day period of isolation and will miss the Scottish champion's clash against Rangers at Parkhead.
Tuesday's announcement came two days after Celtic that Nir Bitton, Elhamed's Israel team-mate, was also ruled out of the first Glasgow derby of the season after testing positive for the coronavirus.
Meanwhile Ryan Christie is self-isolating after being a close contact of Stuart Armstrong, who contracted the virus on international duty with Scotland, while striker Odsonne Edouard suffered the illness while playing for France's Under-21s.
Celtic winger James Forrest is out of the match with an ankle injury.
A statement on the Hoops' website said: "Celtic Football Club can confirm that Hatem Elhamed has tested positive for COVID-19 while on international duty and is now required to enter a 13-day period of isolation in line with regulations in Israel.
"Our medical staff will maintain constant dialogue with him and will provide all required support.
"Everyone at the club sends Hatem our best wishes and, of course, we hope he makes a full recovery as soon as possible.
"We are, of course, disappointed and frustrated that another player on international duty has tested positive - during an international period which is continuing to present huge challenges for the club."
Celtic confirmed: "While FIFA regulations determine that clubs are obliged to release players for international duty, going forward we are sure wider discussions will take place around this hugely important issue. We will monitor these discussions closely."