Sami al-Zayadna, 47, died in the confrontation with police in Rahat, southern Israel, which occurred during the funeral of another bedouin man.
At least 25 Arab Israelis were injured during Sunday's procession.
Clashes broke out again Monday evening, an AFP photographer said, while a police helicopter circled overhead.
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Rahat residents have been on strike since Sunday and representatives of Israel's 1.7 million Arab population have called for a widespread walkout later this week.
The spokesman for Rahat municipality, Marzouq al-Katnani, said "30,000 people participated Sunday in the funeral of Sami al-Jaar" who was shot dead by police investigating a drug network.
"There was shooting... then clashes broke out with police who opened fire and fired tear gas, injuring more than 25," he told AFP.
Police spokeswoman Luba Samri said an investigation had been launched into Sunday's incident, adding officers had been "attacked with stones" as then approached the funeral procession.