A woman is accused of explosives offences against a number of businesses, a jury hears.
Khanna, 49, was visiting the occupied West Bank when he was held for 90 minutes, he says.
Israel's police force says the officer acted "not in accordance with procedure" and that it has opened an investigation.
Israeli nationalists are increasingly flouting a convention on how faiths share the al-Aqsa mosque compound.
Palestinian homes are being pulled down in occupied East Jerusalem to make way for a park.
France will also bar far-right Israeli Minister Bezalel Smotrich from entry as part of the measures, which Israel condemns as "disgraceful".
The suspect opened fire from a car in several locations before being shot dead.
The seven-month-old boy's shrouded body was wrapped in a Palestinian flag and carried by his father to the graveyard.
The Israeli military says Friday's "incident is under review", expressing "deep sorrow for any harm caused".
