The Galilee District Police's Central Unit has launched an investigation into the brandishing of pictures of Hezbollah leader Hassan Nasrallah and the Shiite group's assassinated commander Imad Mughniyeh during the 'Land Day' demonstrations in the Arab-Israeli town of Sakhnin on Tuesday.
Ynet learned on Thursday that police are in contact with the attorney of the main suspect, whose identity is known. The suspect is expected to turn himself in.
A man who took part in the rally was interrogated by police on Thursday, and additional eyewitnesses are expected to be questioned in the coming days.
Investigators said those who waved posters of Nasrallah and Mughniyeh are suspected of "supporting a terror group."
Thousands of people attended Tuesday's rally to mark the 34th anniversary of 'Land Day'.
Participants waved black flags and Palestinian flags and called, "Barak, Barak, defense minister, how many children have you killed today?"
Two masked demonstrators waved posters of Nasrallah and Mughniyeh.
Professor Gadi Algazi, who heads Tel Aviv University's History Department, said some of those who attended the event believed the masked men were actually Israeli soldiers disguised as Arabs. Algazi spoke at the event.
According to him, the act was meant to heighten tensions.
Mohammad Zeidan, chairman of the Higher Arab Monitoring Committee, said in response to the investigation, "There are two versions circulating in the (Arab) sector. One is that the Shin Bet (security service) planted one of its own men to turn public opinion against us. Others claim that the man (who waved the posters) is an extremist who is not a member of our community. Regardless of what the truth is, we consider the act unacceptable."
Sharon Roffe-Ofir contributed to the report