A Jerusalem restaurateur was detained for questioning Sunday after hanging up a Kach t-shirt in his eatery, police said.
The Israeli man, who runs a fast-food store near the city's central bus station, is suspected of supporting and identifying with a terror organization.
The restaurant owner told police interrogators that "he did not know" that Kach was outlawed as a terror organization, Jerusalem police spokesman Shmuel Ben-Ruby said.
He was later released on NIS 4,000 bail.
Police said that they will recommend pressing charges against him.