East Jerusalem, where an overwhelming Arab majority resides, remained tensed a day after clashes between Israeli security forces and Palestinian demonstrators occurred following the discovery of the body of the 16-year-old boy, bearing signs of violence.
The incident appeared to be a revenge attack by rightwing Israeli extremists to avenge the kidnapping and murder of three Israeli teenagers in West Bank earlier this week.
The deceased Arab boy's family has accused the Israeli authorities of holding the body unnecessarily. The police deny the charges.
His father has said he had been told an autopsy was being conducted. More clashes are feared after the funeral.
Protesters threw stones at officers, who responded by firing sound bombs, tear gas and rubber bullets.
Prime Minister Benjamin Netanyahu condemned the murder as "despicable" and said he had ordered police to work "as quickly as possible to find out who was behind the heinous murder of the youth".
Palestinian Authority (PA) President Mahmoud Abbas has accused Jewish settlers in the West Bank of killing the boy and called for "strongest punishment against the murderers."
The family of one of the three murdered Israeli teenagers also issued a statement condemning the killing of the boy.
"If the Arab youth was murdered because of nationalistic motives, then this is a horrible and horrendous act," said a statement from the family of one of the three killed teenagers.
The bodies of the three Jewish seminary students were found near the city of Hebron on Monday, two-and-a-half weeks after they were abducted.
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