"Israel stands thoroughly against this. We promised to investigate. We promised to bring the perpetrators of that crime to justice and guess what? We delivered. We've done exactly that," said Mark Regev, spokesman for Netanyahu.

The teen's father said later Monday that he did not recall speaking with the Prime Minister.

"I was up until 5 a.m. this morning and tried to go to sleep around then," Hussein Abu Khedair said. "Around 7 or 7:30, I started getting phone calls from many Hebrew speaking people. I was tired and could not make out what or who I spoke to. I can't recall speaking to Netanyahu."

In a region that has experienced decades of fighting and mistrust, the past week's events have still managed to shock -- and to further embitter relations between Israelis and Palestinians.

Israeli police also announced Sunday a confession in the killing of a Jewish Israeli teen a month ago. Shelly Dadon, 19, was kidnapped and stabbed to death by an Arab Israeli taxi driver, who has now provided details of the killing, according to Rosenfeld.

'Stop this disgusting cycle of violence'

Meanwhile, the Abu Khedair family is irate over the treatment by Israeli police of one of the burning victim's cousins, an American high school student.

Relatives say Tariq Abu Khdeir, a 15-year-old high school sophomore from Florida, was beaten while being detained amid protests over his cousin's death. (The American branch of the family uses a different spelling of the family surname.)

Khdeir, who was in Jerusalem to visit family during his summer vacation, was released on bail Sunday. The magistrate court ordered that he stay under house arrest for nine days at a relative's house in a different neighborhood from the family home.

"We're extremely concerned that he's under house arrest right now without really facing any legitimate charges that have been made public, and that those who beat him apparently are walking free," his family attorney said Monday, speaking from Florida.

Senior State Department officials told CNN that the United States was instrumental in securing the release of the youth.

Senior officials in the Obama administration said they were shocked at two videos in which Khdeir was seen being held down and pummeled by men in the uniform of Israeli security forces, the officials said.

The officials said they expect Tariq will be able to return home to Florida with his family in the next few weeks.

Israeli authorities say Khdeir was part of a group of youths who attacked police.

"From what I understand about the facts of the case, this is not just an innocent bystander who was pulled off of a schoolyard," Israel's ambassador to the United States, Ron Dermer, told "Fox News Sunday." "He was with six other people. They were masked. They threw petrol bombs and Molotov cocktails at our police. Three of them had knives. ... That does not excuse any excessive use of force, and our Justice Ministry is opening an investigation."

But State Department officials questioned Dermer's remarks.

"They are investigating whether he was throwing rocks," another senior State Department official said. "Even if he was, the question is, was this the right response to that? Obviously we don't think so."

Regev, Netanyahu's spokesman, agreed.

"This is no excuse for this sort of behavior and we're currently investigating it. It's not the police investigating themselves. We've initiated an impartial, objective, independent inquiry into exactly what happened," he said.

'Demolish their houses'