"I didn't do anything, I have nothing against Muslims and Christians," Habibi said. "The only thing I sought was to get my children back."
Habibi and his Christian wife Violet will remain in custody for another 15 days, the court ruled. The couple's daughter, who also took part in the incident, will also remain in custody for 15 days.
Following the court session, Violet fainted and was evacuated to hospital by ambulance.
The attorney representing the three, Pninat Yanai, said she intends to appeal the ruling.
Friday's attack at the Church of Annunciation in Nazareth is a "sensitive, volatile incident both in the national arena and in the international theater," Northern District Police Commander Dan Ronen said earlier Saturday.
During the week, large police forces will continue to secure holy and sensitive sites throughout the district, Ronen said.
The police commander also provided a tally of the injuries and damages that resulted from the church attack and ensuing violence, noting six police cruisers were damaged and two were burned down, while 17 civilians and 10 police officers sustained light injuries.
Also Saturday, thousands of Arabs took part in a March in Nazareth to protest Friday's events. Before the march, organizers and the police agreed to avoid any police presence in the town until the march ends.
Following the march, about 4,000 people took part in a protest rally.
The march started at Nazareth's city hall square and proceeded through the town's main street, ending at the Church of Annunciation. The marchers included relatives of Arab citizens killed by police during the October 200O riots. Some of the relatives held up Palestinian Authority flags during the event.