JERUSALEM - A Palestinian teenager was kidnapped and killed on Wednesday, apparently in revenge for the murder of three Israeli youths, prompting international calls for calm as violence flared in Jerusalem.
Israel's Prime Minister Benjamin Netanyahu condemned the "despicable" killing, urging both sides "not to take the law into their own hands."
And the family of one of the slain Israeli teens, still in mourning, said any revenge murder was a "horrendous act."
Palestinians held Israel responsible, demanding Netanyahu's government act to prevent revenge attacks.
"I demand the Israeli government punish the killers if it wants peace between the Palestinian and the Israeli peoples," said Palestinian president Mahmud Abbas.
US Secretary of State John Kerry warned that acts of vengeance would worsen an explosive situation.
"At this tense and dangerous moment, all parties must do everything in their power to protect the innocent and act with reasonableness and restraint, not recrimination and retribution," he said.
Eyewitnesses told AFP 16-year-old Mohammed Abu Khder was seen being forced into a car by three Israelis in occupied east Jerusalem.
Police confirmed a body had been found in a forest in Givat Shaul in west Jerusalem, although they refused to link the two incidents.
But DNA tests proved the body was that of the missing teenager, his father said.
"The body belongs to my son," Hussein Abu Khder told AFP, adding that the cause of death was not immediately clear.
UN chief Ban Ki-moon called for justice over the "despicable act," while joining British Prime Minister David Cameron and the International Committee of the Red Cross in condemning the killing.
"At this critical time, the ICRC calls on all sides to stand unequivocally against the abduction and murder of civilians," said Red Cross president Peter Maurer. "The current spiral of violence, loss and suffering must stop now."
The attack is widely believed to have been carried out in revenge for the kidnap and killing of three Israeli teenagers, with Israeli police raising the alert to the second highest level.
Despite that, Public Security Minister Yitzhak Aharonovitch said "the motive for the murder cannot be determined for now."
"All leads are being pursued."
Soon after dawn, crowds of angry Palestinians gathered outside the teen's home in Shuafat, with violence erupting within hours and continuing for most of the day.
Hundreds of masked Palestinians hurled stones at Israeli riot police, who responded by firing rubber bullets, tear gas and sound bombs.
The Red Crescent said at least 65 people were wounded, three by live bullets. At least 35 people were injured by rubber bullets, including six journalists.
Shuafat's normally-bustling main road was littered with stones and the light rail service that passes through the neighbourhood was suspended.
Tensions have soared across the region since June 12 when the three Israeli teenagers disappeared while hitchhiking in the West Bank. Their bodies were found on Monday, with Israel blaming Hamas and vowing to hit it hard.
Calls for revenge followed, with more than 200 Israelis rampaging through Jerusalem after the teenaged boys were laid to rest Tuesday, dragging people out of cars and chanting "Death to Arabs."
And police were ordered to investigate the growing number of incitements to hatred and calls for aggression against innocent people on social media sites.
As the clashes raged in Shuafat, where the streets were littered with burning dumpsters and makeshift barricades, the only place of relative calm was the family home.
Suha Abu Khder, the mother of the slain Palestinian, sat in stunned silence, sometimes breaking down in tears in a room filled with loved ones.
A cousin of the teen, Ansam Abu Khder, said witnesses had written down the car's licence plate number and police were examining CCTV footage.
"We knew about Mohammed's kidnapping by three Israelis just before the dawn prayers. A witness saw them," he told AFP.
The family of 16-year-old Naftali Frenkel, one of the three murdered Israeli teenagers, condemned the Palestinian teen's death as a "horrendous act".
"There is no difference between Arab blood and Jewish blood. Murder is murder. There is no forgiveness or justification for any murder," they said in a statement.
But Hamas held Israel's government directly responsible for Wednesday's death, warning it: "You will pay the price for your crimes."
Meanwhile, 10 projectiles, including two rockets intercepted by Israeli missile defence systems, were fired at Israel from the Gaza Strip during the evening, bringing the total over the past 24 hours to 18, the army said.
And one rocket hit a home in Sderot causing damage to the neigbouring road and a power outage in the city in southern Israel, an army statement said.
Israeli aviation targeted the sources of fire with an air strike.
Netanyahu convened his security cabinet on Wednesday night to discuss punitive measures, but commentators said the murder of the Palestinian boy would seriously limit the margin for manouevre.