Shops, schools and businesses were shuttered in Arab towns and villages where a general strike was observed over Saturday's killing of a 22-year-old in Kfar Kana near the northern city of Nazareth.
In the town on Sunday mounted police dispersed masked protesters who hurled stones and fireworks, blocked streets with burning tyres and waved Palestinian flags.
Police spokeswoman Luba Samri said that 22 people were arrested, among them minors.
Kheir Hamdan was shot after he attacked a police vehicle with a knife as officers tried to arrest a relative.
Police say the officers fired warning shots until they felt their lives were threatened, when they aimed directly at him.
Relatives say Hamdan was killed "in cold blood", with CCTV images apparently contradicting the official version.
In the video he is seen banging on a police van window with a knife before starting to run off.
Then a uniformed officer gets out of the vehicle's back door and fires his handgun at Hamdan, who falls to the ground.
Officers then drag his body into the vehicle by one arm.
Israel's attorney general on Sunday convened an emergency meeting on the incident, hearing initial reports from the police internal affairs division, a justice ministry statement said, adding that the inquiry would continue.
STRUGGLING TO COPE
The incident came as Israel struggled to cope with a wave of unrest which has gripped annexed east Jerusalem for more than four months, with police facing off against youths almost nightly.
Arab students protested the Kafr Kana killing Sunday in Jerusalem, the northern port city of Haifa and in Beersheva in southern Israel's Negev desert.
In the northern Arab town of Umm al-Fahm, about 250 people rallied, among them firebrand Islamic cleric Raed Salah, an AFP photographer said.
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Stones were hurled at a bus on the main Jerusalem-Tel Aviv highway alongside the Arab village of Abu Ghosh, police said.
In strife-torn east Jerusalem, clashes raged in Shuafat refugee camp for a fifth straight day as masked youths held running battles with Israeli border police, an AFP correspondent said.
Elsewhere in east Jerusalem, masked Palestinians hurled petrol bombs at police in A-Tur and threw stones in Issawiya, with police responding with "riot dispersal means" in both cases, police statements said.
No injuries were reported.
Saturday's shooting and the outpouring of Arab anger dominated Israel's main newspapers on Sunday.
"They killed him in cold blood because he was an Arab," Hamdan's father Rauf told Maariv, his words reflecting a widely held belief that police are too quick on the draw when an Arab is involved.
"If he had been a Jew, it wouldn't have ended that way. They wouldn't have shot him and if they had, they would have shot him in the leg and he wouldn't be dead," Rauf Hamdan said.
Adalah, an NGO which fights for the rights of Israel's Arab minority, called the shooting "an execution," dismissing the police's version about warning shots.
But Israeli Prime Minister Benjamin Netanyahu vowed that anyone breaking the law would be "punished severely".
"We will not tolerate disturbances and riots," he told the weekly cabinet meeting.
He said he had instructed Internal Security Minister Yitzhak Aharonovitch to look at "revoking the citizenship" of anyone calling for Israel's destruction, in a threat clearly aimed at the Arab minority of around 1.4 million -- some 20 percent of the population.
But several Arab and leftwing parliamentarians blamed the bloodshed on Aharonovitch who said last week that any "terrorist" who harms civilians "should be killed".
"This sweeping statement by the minister could be interpreted as taking off the gloves to allow the use of deadly force for reasons that are not justified and against the law," Israeli rights group ACRI warned in a letter to the attorney general.
"Lethal force can only be used by police as a last resort," it wrote.