A top Palestinian security official said police had arrested a member of the Islamist Hamas group over the assassination of award-winning Arab-Israeli actor and director, Juliano Mer Khamis.

"One of those arrested is a prime suspect in the killing, he belongs to Hamas and is being interrogated," the official, who declined to be named, said on Tuesday,

Jenin governor Qaddoura Moussa also declined to reveal details about the suspect in Monday's killing of Mer Khamis, 52, who was shot dead by a masked gunman, but he added that a number of other suspects had been held and were later released.

Western powers, including the United States and European Union view Hamas as a terrorist organisation. It took control of the Gaza Strip in 2007 in a brief war with security forces loyal to Palestinian President Mahmoud Abbas.

"The security forces have arrested a number of people, there is an ongoing investigation," Moussa told Reuters.

Mer Khamis, the son of a Jewish mother and Christian Arab father, ran the Freedom Theatre in Jenin's refugee camp in the northern West Bank for several years. He was driving his car near the theatre with his infant son and a babysitter when the gunman ordered him to pull over and shot him.

Palestinians in the Jenin area and in the West Bank seat of government in Ramallah held memorial vigils for Mer Khamis.

"This is a sad day for the Palestinian people, you cannot find anyone here who is not against the killing except for the killer," said Qasem Ahmad from Jenin refugee camp.

Mer Khamis' project generated hostility from some Palestinians. In an interview in 2009 after the Jenin theatre was torched he said: "We are under attack from a small group of people who think the arts are undermining the Palestinian struggle," he said.

"They put out leaflets calling me a Zionist Jew whose hands should be cut off."

His documentary entitled Arna's Children about his mother and the theatre group won the Best Documentary Feature in the 2004 Tribeca Film Festival.

The Jenin refugee camp, where Mer Khamis lived with his partner and children, is home to some 16,000 Palestinians. It was the scene of some of the fiercest Palestinian-Israeli fighting in the second intifada, or uprising, in 2002.

The United Nations Middle East envoy, Robert Serry, said in a statement: "I am shocked and saddened by the murder of Juliano Mer Khamis, he was a unique, talented actor and director and was also a symbol of co-existence and peace."

Palestinian Prime Minister Salam Fayyad condemned the murder as an "ugly crime".

Born in the Israeli-Arab city of Nazareth Mer Khamis served in the Israeli army as a paratrooper and portrayed Israeli Jews in many of his roles both in film and on stage.

He appeared in almost 30 movies, including "The Little Drummer Girl" a 1984 American thriller based on the John Le Carre book of the same name that starred Diane Keaton.