Israeli soldier arrested on suspicion of murdering Palestinian
The police had previously arrested a 23-year-old Israeli man on suspicion of shooting Abu Khdeir, 27.
However, according to reports, investigators now believe that the soldier had sent the other man on his behalf to Shuafat to carry out a drug deal. When the deal went wrong, the man shot Abu Khdeir.
Eyewitnesses said at the time that Abu Khdeir was shot by a masked gunman riding a motorcycle, who fled the scene following the incident.
Medical teams attempted to resuscitate Abu Khdeir but he died shortly after.
The police tracked down the shooting suspect at his home in Netanya, Israel, were they also found the weapon and ammunition.
The suspect appeared in court in Jerusalem on 14 August, during which his lawyer claimed he shot Abu Khdeir in self defence.
The case is a rare example of an investigation into gun crime involving Palestinians in Israel and the occupied territories.
An estimated 95 per cent of shooting incidents in Israel occur in Palestinian communities, as do nearly 60 per cent of murders. Palestinians say the police does little to track down the perpetrators.
The rising murder rates in the marginalised community have spawned a grassroots protest movement, involving senior figures within the Palestinian Joint List party, who collectively decry Israeli police inaction and political indifference to resolve the crisis.
Analysts believe that a large section of criminal activity is rooted in the Palestinians' exclusion from the formal Israeli economy and competition over scarce resources, as well as decades of social exclusion.