Prime Minister Benjamin Netanyahu has warned Israelis against vigilantism following the death of an Eritrean man mistakenly shot and beaten by a mob during an attack in which a soldier was killed.
More than two weeks of unrest have raised warnings of the risk of a full-scale Palestinian uprising, while some Israeli politicians have urged residents to arm themselves to fend off the threat of stabbings and gun assaults.
The attacks, and violent protests which have erupted across Israel and the Palestinian territories, have prompted a range of security measures, while Israel has rejected a proposal for international observers at a key religious site.
"We are a law-abiding country. No one must take the law into their own hands," Netanyahu told officials from his Likud party on Monday (local time) after Sunday night's incident in the southern Israeli city of Beersheba.
The mob violence came after a gunman also armed with a knife stormed a bus station in Beersheba, shooting dead 19-year-old soldier Omri Levi and wounding around 10 others.
The gunman, identified as 21-year-old Arab Israeli Mohannad al-Aqaby, was killed, while a security guard at the bus station shot the 29-year-old Eritrean thinking he was a second attacker. A mob also beat him, Israeli media reported.
Video that spread online appears to show the Eritrean lying on the ground after being shot and receiving blows to the head and body from angry bystanders.
Police identified him as Habtom Zarhum, with Israeli media describing him as an asylum seeker, like many Eritreans who have come to Israel.
The police promised an investigation, saying they "considered this incident as extremely serious".
The relentless violence has defied an Israeli security crackdown as well as international calls for both sides to calm tensions.
Many of the attacks have seen young Palestinians with knives stabbing Israelis before being shot dead.
At least 41 Palestinians have died since the start of the month, including alleged attackers, while eight Israelis have been killed.
Clashes at the Al-Aqsa mosque compound between Israeli police and Palestinian protesters in September preceded the current wave of violence.
Muslims fear Israel will seek to change rules governing the site, the third holiest site in Islam, which is located in Israeli-annexed east Jerusalem.
It is also the most sacred site for Jews, who refer to it as the Temple Mount and who are allowed to visit but not pray there to avoid provoking tensions.
Netanyahu has said repeatedly he has no intention of changing the rules.
US Secretary of State John Kerry renewed his call for an end to the violence, while adding that "Israel has every right in the world to protect itself".
On Sunday, Israel controversially began erecting a temporary wall between the east Jerusalem Palestinian neighbourhood of Jabel Mukaber and Jewish neighbourhood Armon Hanatziv to protect it from firebomb and stone attacks.