A pioneering community theatre that aimed to replace violence with drama in one of the most battle-scarred Palestinian towns has hosted its first performance since the murder of its director.

Israeli and Palestinian police have not identified the gunman who shot and killed Juliano Mer Khamis in April, but on Tuesday students from Jenin's Freedom Theatre performed Shu Kamam, or What Else, as a defiant message that they will continue his work.

Jacob Llyr, the acting director, said hostility to the theatre had decreased in recent weeks. "There are no longer warnings being left at the mosque but people are scared to come to the theatre. We are not expecting anyone from the town or the camp to come to this show but as we show that we are still here people will grow less scared."

Mer Khamis, son of an Israeli mother and a Palestinian father, founded the theatre to help refugee camp residents find a creative outlet for their frustration. But many people in Jenin were alienated by the relative modernity of the theatre work, involving men and women working together, and the anti-authority nature of its plays.

Staff and supporters of the theatre were concerned that the death of Mer Khamis would leave a vacuum that would be impossible to fill as he dominated all aspects of the theatre's organisation. But Jonatan Stanczak, who founded the Freedom Theatre with Mer Khamis, said: "There's a determination to continue the work in spite of the many difficulties. The team is strong enough to deal with the problems."

"The biggest problem is that we still don't know why Juliano was killed or by whom. This makes it hard to make decisions. We are trying to talk to everyone and initiate dialogue and activities with the refugee camp and the town. We hope that in time we will re-establish good relations with everyone."

Two weeks ago, Mer Khamis's partner, Jenny Nyman, gave birth to their two sons, Kai and Liam, in Haifa. Nyman continues to support the theatre although she has not returned to Jenin since the murder.

Llyr, from Aberystwyth, said they had been contacted by new donors and had to convince old donors that the Freedom Theatre would continue without its charismatic director.

"We are trying very hard. The organisation has had to change as we have lost our managing director, artistic director and chief fundraiser," he said.

Future projects include the creation of a Gaza offshoot, a conference and festival on drama and conflict, and the creation of a travelling theatre group. The students' production of Waiting for Godot, which is due to be performed at the end of August, will also go on tour around the West Bank.

"We need to increase our Palestinian support by going from camp to camp and village to village, to places where they have never had theatre, to build the concept of theatre as a model for social change," said Llyr.

Staff at the theatre remain cautious. "Before, we felt we could judge the local situation. There was also a balancing act between pushing boundaries and keeping a low profile, but after the killing of Juliano we don't know any more," said Llyr.

The first-year students' play is a series of physical sketches about Palestinian life. The cast is all male as one female student dropped out and the other was not allowed to join the cast of the play when it tours France and Germany this year.

The play features violence and figures of authority who divide, corrupt and mock the cast. There are also contradictory images of women who are represented by scarves and then as an authority figure who first seduces then attacks the cast. The play ends with the cast running on the spot before falling down, "like hamsters on a wheel", according to one of the directors.