The body of a 46-year-old former Gaza resident believed to have once worked with Israeli security services was found in a forest in the South on Wednesday.
Police said signs of injury were identified on the body, and have launched a murder investigation.
The homicide victim has been named as Jamal Shada, a Palestinian father of four who resided in Sderot for eight years with his wife.
Searches were launched earlier on Wednesday after Shada's wife reported him missing.
The murder investigation is being led by the Lachish police sub-district's Central Unit, under the command of Dep.-Cmdr. David Bawani.
Police have obtained a court-imposed media ban, prohibiting publication of further details on the case.
"We are looking at every possible direction," a police source said.