A 14-year-old resident of the Druze village of Ussfiya was arrested after admitting to starting the fire that destroyed much of the Carmel Forest.
The teen reportedly said he was smoking a nargila water pipe and threw a live coal into an open area before returning to school.
The arrest was announced hours after two teenage brothers from the same village arrested over the weekend on suspicion of negligence in starting the fire were released from detention by a Haifa court. The teens had been accused of lighting a bonfire near their home that sparked the blaze.
Also Monday, the number of Israelis killed in the fire rose to 42 with the death of Haifa Police Chief Ahuva Tomer.
Thousands attended the Monday afternoon funeral of Tomer, the police chief since March 2009 and the highest-ranking female officer in the Israel Police.
She was burned over 90 percent of her body last week after trying to assist prison guard cadets riding in a bus that caught fire while on its way to evacuate a prison in the path of the blaze. Most of the bus passengers and three volunteer rescuers died in the fire in northern Israel.
Israeli Prime Minister Benjamin Netanyahu on Monday ordered the Finance Ministry to provide nearly $700 immediately to each member of families who will be prevented from returning to their damaged homes for at least the next month.
The funds are designated for basic, emergency necessities such as clothing and shoes, and school supplies.
The allocation came during a special Knesset hearing on the fire and its consequences, which opened with a moment of silence.
Later in the day, Netanyahu ordered the creation of a national firefighting command under the authority of the Prime Minister’s Office.
He also appointed Netanya Mayor Miriam Fierberg to head a task force in charge of managing assistance for those whose homes were damaged in the fires.