Israeli police on Tuesday announced the arrest of a Palestinian man suspected of leading the group that kidnapped and murdered three Israeli teenagers in June.

"Hossam Kawasmeh was arrested by Israeli security forces last month in Shuafat (a neighbourhood of Arab east Jerusalem), on suspicion of leading a commando group that kidnapped and murdered the three adolescents," the police said in a statement.

The June 12 kidnappings and subsequent murder of teenagers Naftali Frenkel, Gilad Shaer and Eyal Yifrach in the West Bank triggering a crackdown on Hamas in the West Bank and an uptick of rocket fire from Gaza where a three-day ceasefire began on Monday.

The youths disappeared from a hitchhiking stop in the southern West Bank and were found dead on June 30.

Israel rounded up hundreds of Palestinians in a bid to find the three while they were missing , also crushing the West Bank network of Islamist movement Hamas, which it accuses of abducting the teens, though there has been no claim of responsibility.

According to Israeli media, Hossam Kawasmeh made it known during his interrogation that he received financial help from Hamas operatives in Gaza to recruit and arm the kidnappers.

Israeli authorities are still searching for two other Palestinians in connection with the murders, police said Tuesday.