Johara Khnifes, 28, was the daughter of Faraj Khnifes, deputy mayor of northern Shfaram.
Faraj Khnifes is also known for defending the rights of the Arab minority in the country.
Authorities said that the initial investigations ruled out as a motive for the crime the work of her father, who claimed otherwise after her death on Tuesday evening.
She was a flower and did no harm to anyone, maybe she was looking for me, the official said.
According to several reports, her death was the 32nd Arab-Israeli assassination since early January.
The Arab communities have experienced an increase in violence in recent years, mainly driven by organized crime, amid criticism to the passivity of the police in dealing with the problem.