Armed attacks by members of Israel's Palestinian minority on Israeli Jews are rare, as is the ability of a suspect to stay off the Israeli security services' radar for so long.
Jafar Farah, who heads the Mossawa advocacy centre for Palestinians in Israel, said Netanyahu had leapt on the incident to vilify the Palestinian minority.
"We see Netanyahu and the Israeli right exploiting every opportunity to incite against Arab citizens," he told MEE, noting that in widely criticized comments the Israeli prime minister had warned during last year's general election campaign that Palestinian citizens were coming out to vote "in droves."
"This is connected to the right's goal of suggesting that there is no solution to the Israeli-Palestinian conflict. Netanyahu wants to argue that all Muslims and all Arabs are the enemy, and that there can never be peace."
Immediately after the shootings, the High Follow-Up Committee, the main political body for Palestinians in Israel, issued a statement condemning the attack and calling it a "serious deviation from the justified struggle of the Arab population to obtain their rights."
The committee added that Netanyahu had turned "incitement into an ideology."
On Tuesday, half a dozen of Melhem's relatives, including his 63-year-old father, Mohammed, were arrested, accused of being accomplices. The family is from Arara, a Palestinian village in central Israel, south of Umm al-Fahm.
His brother, Juadat, arrested last weekend, was freed by the courts on Wednesday, over police objections, apparently after the police failed to provide credible evidence of his involvement.
Melhem's sister and mother have also been detained for lengthy questioning. Israeli news website Ynet quoted a relative saying the mother had been interrogated for 10 hours and threatened that her home would be demolished if she did not reveal Melhem's hiding place.
"The interrogators put a great deal of pressure on her," the relative was reported saying.
Israel has demolished family homes of several so-called "lone-wolf attackers" from the occupied Palestinian territories after a wave of incidents, mainly using knives, began in the late summer. The Israeli courts approved the punishment as a way to deter further attacks.
History of violenceMelhem's family was quick to condemn the shootings and urged him to hand himself in. Police now appear to believe he may have gone to ground in the West Bank.
Relatives also warned that Melhem was mentally unstable and had a history of violence towards his own family and others, triggered by the killing of a cousin exactly a decade ago. Police shot dead Nadim Melhem during a raid on his home while searching for a gun.
A year later, in 2007, Nashat Melhem was convicted of trying to grab a soldier's gun and sentenced to five years in prison. He told interrogators at the time that he had intended to avenge his cousin's death.
Nadim Melhem is one of 56 Palestinian citizens who have been killed in unexplained, and largely uninvestigated, circumstances by the Israeli security forces in the past 15 years, said Farah of Mossawa.
A judicial-led state inquiry found in 2004 that the Israeli police's institutional view of the Palestinian minority was as "an enemy."
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