Although the investigation was subject to a gag order, Honenu, a legal organisation which defends right-wing Jewish extremists, said it was representing six people -- three of them minors -- whose remand was extended Sunday by the Petah Tikva magistrates court.
The arrests came as suspicion grew that Wednesday's murder was carried out by extremist Jews in revenge for last month's abduction and murder of three Israeli teenagers in the occupied West Bank.
Tensions were also high early Monday in the south with two separate Israeli drone strikes killing two Palestinian militants and wounding one in a strike east of Bureij refugee camp near central Gaza, and killing another two and wounding two east of Rafah in its south.
Ezzedine al-Qassam Brigades, Hamas's military wing, said meanwhile that six of their men were killed by the Israeli strike on Rafah, but Gaza medical sources could only confirm the two deaths.
Witnesses said the two Qassam members were killed when a tunnel collapsed on them following the Israeli strike, with the bodies of the other four still in the tunnel.
The Israeli attacks came after over 25 rockets and mortars from Gaza hit southern Israel during Sunday.
But Israel still appeared determined to contain the situation, with Prime Minister Benjamin Netanyahu urging his cabinet to keep a cool head over how to tackle Gaza.
On Israel's northern front, a mortar shell fired from Syria hit the northern Israeli occupied Golan Heights, the military said.
"No injuries or damage was reported," a statement read, noting the Israeli army "immediately fired towards suspicious positions".
- Calls for probe -
Initial findings from a post mortem showed the teenager had smoke in his lungs, indicating he was still alive when he was set on fire.
The grisly murder sparked shock, disgust and an outpouring of condemnation from both Israeli and Palestinian leaders.
Palestinian president Mahmud Abbas said he had asked UN chief Ban Ki-moon to form "an international investigative committee" to probe Israeli crimes against the Palestinian people, including the teen's murder.
Jerusalem Mayor Nir Barkat spoke with the boy's father by phone, sending his condolences for the "severe and barbaric killing".
Netanyahu also offered his condolences to the family as a slew of cabinet ministers harshly condemned the murder.
"I pledge that the perpetrators of this horrific crime will face the full weight of the law," Netanyahu said.
Violent protests spread from east Jerusalem to Arab Israeli towns after the boy's funeral on Friday, reaching by Sunday night Nazareth and Tamra in the north, as well as Bedouin towns in Israel's south.
- Probe into police violence -
In a related development, a Jerusalem court freed an American boy but ordered him held for nine days under house arrest pending an investigation into stone-throwing allegations.
Tariq Abu Khder, a 15-year-old from Florida on holiday and a cousin of the murdered teen, was arrested Thursday in east Jerusalem as protests raged. Reports said he was badly beaten in police custody.
Washington said it was "profoundly troubled" by the reports and called for a speedy investigation, prompting Israel to probe a video clip showing border police beating a handcuffed figure.
"I was watching the protest... There were some soldiers, I looked at them and I ran because they were running after me too," the teen told AFP Sunday. "I was attacked by a couple of cops... While they were hitting me, I fell asleep, I went unconscious."
Meanwhile, Netanyahu demanded his cabinet keep a cool head about growing tensions in and around the Gaza Strip where militants have stepped up rocket fire in the past three weeks, prompting demands for a new military operation in the coastal enclave.
So far, Israel has responded with air strikes, killing at least seven militants.
"Experience has proved that at moments like this, we have to act responsibly and with a cool head and not with harsh words and impetuousness," he told the weekly cabinet meeting.