Still at large: Nashat Melhem
Still at large: Nashat MelhemHandout photo

The brother of the Israeli Arab terrorist who shot dead two people and left scores wounded in Tel Aviv last Friday was been released from police custody Wednesday afternoon.

Jaudat Milhem was among several relatives of 29-year-old killer Nashat Melhem arrested in recent days, and was released despite recommendations by the Shin Bet security agency that he be held in custody.

Investigators are reportedly looking into the possibility that the gunman's family helped him flee the scene and hide following the attack - claims his family stringently deny.

Upon his release, Juadat reiterated his family's calls for his brother to hand himself in, and said his family had nothing to do with the attack and deeply regret what happened.

"I have no connection to what happened in Tel Aviv. All the others arrested also have absolutely no connection to the event," Milhem said. His father - a police volunteer - is currently still being held in custody.

"None of us know where Nashat is," he insisted.

He added that he broke down in tears during several hours of "tough" police interrogation, and urged his brother to hand himself in for the sake of his family. He also claimed police threatened to demolish the family's home if they withheld information on Nashat's whereabouts.

"He (Nashat) should look how we are living in trauma... His mother, his father, his brothers... None of us believe (what's happening)," he said.

Police have arrested several other family members - including the gunman's father Mohammed and an uncle - and suspect that Mohammed in particular acted as an accessory to murder by aiding his escape.

Police have requested Mohammed's remand be extended by a further 12 days as the investigation into the attack - and the massive manhunt to track down the gunman, who is still out large - continues.