In the video, a youth identifying himself as 19-year-old Mohammed Said Ismail Musallam is shown kneeling in front of a boy who appears to be no more than 12-years-old. A man stands at his side.
Dressed in an orange jumpsuit that is standard in videos of IS executions, the man seen kneeling recounts how he was recruited by Israeli intelligence, a claim denied by his father.
The boy, who shouts "Allahu Akbar" ("God is greatest" in Arabic), then shoots the man four more times as he lies on the ground.
"We are checking" the identity of the man, a police source who wished to remain anonymous told AFP.
Several experts, including journalist David Thomson who wrote a book about French jihadists, say the man is Sabri Essid, reportedly the half-brother of Merah who shot dead three soldiers in southern France in 2012 before killing three students and a teacher at a Jewish school more than a week later.
Another source close to the case, who also wanted to remain anonymous, said there were "similarities" with Essid, adding they could not be certain.
Known to intelligence services as a key figure in the radical Islamist community in Toulouse, Essid is suspected to have left France for Syria last year.
Merah's sister Souad also left for Syria last spring, reportedly with family members.
Essid had already been caught in December 2006 in Syria in a house known to shelter Al-Qaeda members on their way to Iraq.
His father had lived with Merah's mother, and Essid was close to the killer and his brother Abdelkader.
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