Prime Minister Ariel Sharon has condemned the gunman, who was beaten to death after the attack by residents in the Arab town of Shfaram, as a "bloodthirsty terrorist".
And he vowed that Israel would begin pulling its settlers and forces out of the occupied Gaza Strip as planned on 17 August, no matter what attempts were made to thwart it.
Thousands of Israeli police have been re-deployed to Arab areas of northern Israel, where Thursday's attack aboard a bus occurred, to pre-empt potential riots before or after funerals for the four dead.
Another feared hotspot is Jerusalem's al-Aqsa mosque, where Friday prayers were scheduled.
The main Palestinian resistance faction Hamas, which with other armed groups adopted a de facto ceasefire with Israel in February, has threatened reprisals for the bus shooting.
Hamas has threatened reprisals
for the bus shooting
Security agencies have warned that Jewish militants could target Palestinians or Israeli Arabs to whip up conflict to try to stop the removal of Jewish settlers from occupied Gaza.
Sharon bills his plan as "disengagement" from conflict with the Palestinians. It would be Israel's first dismantling of settlements in occupied territory that Palestinians want for a state.
Israel's army said the gunman, Eden Nathan Zaada, 19, was a soldier who had deserted and was "of a problematic background".
Aside from the four dead, at least 22 people, all but seven of them Arabs, were hurt in the shooting and an ensuing melee.
It was the worst attack by a Jewish radical since a West Bank settler killed 29 Palestinians praying in a mosque in 1994.
A shrine of flowers stood at the scene of Thursday's attack. Municipal cleaners were sweeping away shattered window glass.
"Our town is at the heart of the state of Israel and they are targeting people here," said cleaner Mounir Baki.
"It [rioting] could happen. There could be a lot of problems today. If it happens, it will be against the police, because yesterday they wanted to protect this terrorist," said Wafiq Abu Shah, referring to initial police efforts to arrest the gunman.
"The state is not doing enough (to protect) its Arab citizens"
Mounir Baki, an Arab cleaner in northern Israel
Israeli media said Zaada, who was from a Tel Aviv suburb but moved recently to a radical Jewish settlement in the West Bank, had left his unit in protest at army preparations to forcibly remove settlers who resist evacuation from Gaza.
Israel Radio said police had arrested three youths in the settlement of Tapuach on suspicion they had prior knowledge of his intent to kill Arabs.
"The attempt to harm Jewish-Arab coexistence will not succeed," Foreign Minister Silvan Shalom said on Israel Radio.
"On this day, we need to do all we can to calm tensions. I call on the Arab leadership to work to put things back on track."
Arabs make up about one-fifth
of Israel's population
Arabs make up about one-fifth of Israel's population and often complain of discrimination.
The government has accused some ultranationalists of trying to incite violence ahead of the plan, which involves removing 9000 settlers from Gaza and a corner of the West Bank.
Some of the police sent as reinforcements to northern Israel had been stationed outside Gaza to try to prevent rightist marchers from infiltrating settlements to disrupt the pullout.