Private Edan Nathan-Zaada, a resident of the extremist Jewish settlement of Tapuah in the West Bank, shot dead four Arab civilians on a bus on Thursday.
On Friday, thousands of Israeli police were re-deployed to Palestinian areas in northern Israel, near the city of Haifa where Thursday's bloody attack aboard an inter-city bus took place, to pre-empt potential unrest as two of the victims were buried.
Aljazeera correspondent, Ilyas Karram, reporting from the town of Shafaram, scene of the killings, said thousands of mourners joined a funeral procession for two sisters, Hazar and Dina Turki, both in their 20s killed by the soldier.
"The martyrs are beloved by God," the crowd chanted.
Aljazeera showed the crowd chanting slogans including: "With our souls, with our blood we will sacrifice our lives for you, O Quds". Quds refers to the al-Aqsa Mosque compound in Jerusalem.
Also killed by the Israeli soldier, were two Palestinian Christians, Nader Hayak and Michael Bahous, one was the bus driver and the other a passenger.
At least 22 Palestinians were wounded in the attack, referred to by Israel as a "terrorist act".
Nathan-Zaada was bludgeoned to death by a crowd after the shooting.
Terror against Arabs
"It seems like Jewish terror against Arabs," police spokesman Avi Zelba said.
Israeli Prime Minister Ariel Sharon also condemned the killings calling it "a sinful act by a bloodthirsty terrorist".
Nader Hayak and Michael Bahous
were also laid to rest on Friday
Nathan-Zaada's father, Yitzhak, said on Thursday that his son had run away from his army unit several weeks ago, after he was told he would have to participate in the Gaza pullout.
Nathan-Zaada said he was concerned his son's weapons would fall into the hands of fanatics in Tapuah.
"I wasn't afraid that he would do something. I was afraid of the others," Nathan-Zaada said.
He said he had no indication his son would carry out such an act. "I spoke to him two days ago and he was a happy and good-hearted boy and he told me he would find the time to return the weapon," Nathan-Zaada said.
Jewish terror group
Tapuah is one of the most extreme Jewish settlements, dominated by followers of US-born Rabbi Meir Kahane, who in 1968 established the Jewish Defence League, the forerunner of the Kach movement and later the Kahane-Kach movement.
The declared goal of the movement at the time was to combat black anti-Semitism in the US but was later declared racist by Israel for inciting hatred against black Jews in Dimona.
The organisation promotes the expulsion of Arabs from Israel and the West Bank. Kahane was assassinated in New York in 1990.
The Kahane-Kach movement and its affiliates are also classified as "terrorist groups" by both the US State Department and Israel.
There have been several incidents of Jewish extremists attacking Palestinians living inside Israel over the years. These Palestinians are commonly referred to as Israeli-Arabs.
"With our souls, with our blood we will sacrifice our lives for you, O Quds"
Mourners chanted at the funerals of the slain Palestinians
Israeli-Arabs, also referred to as Palestinians in the 48 area, are said to make up about 20% of Israel's population of 6.9 million, mainly Jews.
They remained in their homes during the 1948-49 war that followed the creation of the state of Israel, while hundreds of thousands of Palestinians were driven out or fled.
Though Israeli-Arabs are said to be full citizens, they have suffered from discrimination by Jewish-dominated governments.
Many of their towns and villages lack basic infrastructure, and Palestinian localities are usually at the top of Israel's unemployment lists. They also live in separate areas.
In 1990, during the first intifada, an Israeli settler opened fire at a bus stop where Palestinians gathered for job placements, killing seven.
In 1994, Baruch Goldstein, an American-born Jewish settler, also a member of the Kach group, entered the Ebrahimi Mosque in the West Bank city of Hebron and killed 29 Muslim worshippers during the pre-dawn prayer, with an automatic weapon issued to him by the Israeli army.
Israeli PM Ariel Sharon called the
soldier 'a bloodthirsty terrorist'
Anger spilled over in October 2000, when thousands of Arabs rioted in support of the second intifada (Uprising), which erupted the month before after the provocative visit to the Al-Aqsa Mosque compound by Ariel Sharon.
Israeli police shot and killed 13 Palestinians, further infuriating and alienating many Arabs.
No formal burial
Meanwhile, Israel's army said Nathan-Zaada, 19, had deserted his unit recently and was "of problematic background". Defence Minister Shaul Mofaz had ordered that Nathan-Zaada not be buried in a military ceremony.
The Israeli municipalities have also refused to grant him a civilian funeral.
Nathan-Zaada's family and friends raced to Israel's national mortuary and demanded he be brought to rest.
His body is to stay there over the weekend as talks continue.
The Nathan-Zaada's lawyer, Benny Deref, told Israel's Channel 2 television that the soldier's parents had contacted the army two weeks ago to say he was armed, held ultra-nationalist views and could be dangerous, but nothing was done.