Ali Mahajneh, 24, from Umm al-Fahem was one of 12 suspects held after a wave of fires hit central and northern Israel.
Mahajneh, who had been detained since November 25 on suspicion of arson, was released Tuesday, the last of the suspects to be let go. The suspects were held on suspicion of arson or incitement to arson.
The court ordered Mahajneh released because it ruled he was burning trash near his home, not intending to start a fire.
Police have no suspects in custody, though the investigation continues, said Israeli police spokeswoman Luba Samri, who declined to elaborate on where the probe goes from here.
Of the 80 major fires investigated by firefighting authorities, 71 were determined to be arson, Israel Fire and Rescue Services spokesman Yoram Levi said Friday. The fires damaged or destroyed some 700 homes in Haifa, the third-largest city in Israel
More than 1,500 fires were reported to Israeli authorities, said Ran Sheluf, head of the investigation unit of the Fire and Rescue Services.
In November, firefighters struggled to get the largest fires under control in high winds and dry conditions. Prime Minister Benjamin Netanyahu said then that if the fires were intentionally set, he would treat them as terrorism
"Every fire that was caused by arson, or incitement to arson, is terrorism by all accounts. And we will treat it as such," Netanyahu said.
Education Minister Naftali Bennett, leader of the right-wing Jewish Home party and a vocal opponent of a Palestinian state, pronounced on Twitter, "Only he who the country doesn't belong to is capable of burning it," making an indirect reference to Palestinians.
Ayman Odeh, head of the Arab Joint List alliance, fired back at Israeli politicians who were blaming the fires on Palestinians.
"During this stormy day, I have been moving between different media, in an attempt to say this clearly: This is our home and it is our duty to preserve it. Now is the time for joint cooperation, to help evacuate the elderly and all those who need help," he wrote on Facebook.