JERUSALEM (AFP) - Israel on Sunday arrested a group of Jewish extremists in connection with the kidnap and murder of a Palestinian teenager who was burned to death in a suspected revenge killing.

The brutal murder of 16-year-old Mohammed Abu Khder on July 2 triggered four days of violent clashes which broke out in east Jerusalem and have spread to Arab towns in Israel, with hordes of angry protesters hurling stones at riot police.

"A number of Jewish suspects were arrested by the Shin Bet and Israeli police before dawn on July 6 on suspicion of involvement in the kidnapping and murder of Mohammed Abu Khder from Shuafat on July 2," Israel's internal security agency said.

Although the investigation was subject to a gag order, Honenu, a legal organisation which defends right-wing Jewish extremists, said it was representing six people - three of them minors - whose remand was extended Sunday by the Petah Tikva magistrates court.

The arrests came as suspicion grew that Wednesday's murder was carried out by extremist Jews in revenge for last month's abduction and murder of three Israeli teenagers in the occupied West Bank.

Tensions were also high Sunday in the south with an Israeli drone killing two Palestinian militants and wounding another east of Bureij refugee camp, near central Gaza's border with the Jewish state, after over 25 rockets and mortars from Gaza hit southern Israel during the day.

But Israel still appeared determined to contain the situation, with Prime Minister Benjamin Netanyahu urging his cabinet to keep a cool head over how to tackle Gaza.

Initial findings from a post mortem showed the teenager had smoke in his lungs, indicating he was still alive when he was set on fire.
The grisly murder sparked shock, disgust and an outpouring of condemnation from both Israeli and Palestinian leaders.

Palestinian president Mahmud Abbas said he had asked UN chief Ban Ki Moon to form "an international investigative committee" to probe Israeli crimes against the Palestinian people, including the teen's murder.

Jerusalem Mayor Nir Barkat spoke with the boy's father by phone, sending his condolences for the "severe and barbaric killing".
Mr Netanyahu also offered his condolences to the family as a slew of cabinet ministers harshly condemned the murder.

"I pledge that the perpetrators of this horrific crime will face the full weight of the law," Mr Netanyahu said.

President Shimon Peres said: "We do not distinguish between blood and blood. The murder of a child is reprehensible, regardless of the religion or nationality of the child." Violent protests spread from east Jerusalem to Arab Israeli towns after the boy's funeral on Friday.

On Sunday evening, around 100 Arab Israelis demonstrated in the northern city of Nazareth, police said. Two people were arrested.

Further north, police made 14 arrests in Tamra during stone-throwing clashes with police during which flares were fired, a spokeswoman said.

Clashes later spread to Palestinian neighbourhoods in eastern Jerusalem, as well as a Bedouin town in Israel's south, where according to police 12 were arrested.

In a related development, a Jerusalem court freed an American boy but ordered him held for nine days under house arrest pending an investigation into stone-throwing allegations.

Tariq Abu Khder, a 15-year-old from Florida on holiday and a cousin of the murdered teen, was arrested Thursday in east Jerusalem as protests raged. Reports said he was badly beaten in police custody.

Washington said it was "profoundly troubled" by the reports and called for a speedy investigation, prompting Israel to probe a video clip showing border police beating a handcuffed figure.

"I was watching the protest... There were some soldiers, I looked at them and I ran because they were running after me too," the teen told AFP Sunday. "I was attacked by a couple of cops... While they were hitting me, I fell asleep, I went unconscious."

Meanwhile, Mr Netanyahu demanded his cabinet keep a cool head about growing tensions in and around the Gaza Strip where militants have stepped up rocket fire in the past three weeks, prompting demands for a new military operation in the coastal enclave.'

So far, Israel has responded with air strikes, killing five militants.

"Experience has proved that at moments like this, we have to act responsibly and with a cool head and not with harsh words and impetuousness," he told the weekly cabinet meeting.