The boy was released by his captors with the aid of the Jarushi crime family from Ramla and the Hariri crime family from the Triangle area.
Karim's father Jabar thanked all who took part in the search for his son, while Karim himself thanked the police in Arabic, saying "Shukran al-police."
The boy's father told Ynet after his release that "our children should not be used for money... I got a lot of offers (to help pay the ransom), but eventually decided I won't even give them one shekel. Tomorrow, our children will stay at home and won't go anywhere. We're scared for our children."
Thousands of people gathered in Qalansawe to celebrate Karim's return. Among those cheering and clapping for Karim were also most of the Arab members of Knesset.
MK Esawi Freige (Meretz) expressed satisfaction with the fact that "the public pressure worked" to bring about Karim's release.
"The best thing to come out of this nightmare is that maybe the other shoe dropped and people realized a kidnapped Israeli boy is just as important as a Thai boy trapped in a cave," he added.
Haj Karim Jarushi, who headed the efforts to secure the boy's release on behalf of the family, told Ynet that Karim was doing great.
"It's just moving. From the moment we learned Karim had been kidnapped, we were busy trying to return him to his family," he said. "The whole time I knew the boy was okay, and that he was being taken care of. When I saw him, I was really emotional."
Jarushi said he was sure the boy would not come to harm. "I knew we could return him to his family, it was only a matter of time," he added.
Karim was apparently held in the Am'ari refugee camp near Ramallah. One of the people who helped bring about his return said that "every day they moved him from house to house."
Immediately after his release, Karim was taken to a police station in the city, where he met with Police Commissioner Roni Alsheikh.
The police chief said that while the boy's release is exciting, "it is only the beginning of the journey in constructing indictments - so everyone (involved) will pay the price, and in order to create deterrence against such actions in the future."
Internal Security Minister Gilad Erdan welcomed Karim's release, saying, "I thank the Israel Police and all of the units that used all of their capabilities to locate Karim and return him unharmed to his family. I hope the kidnappers spend many years behind bars."
The Israel Police was quick to issue a statement about the boy's release, saying that "after a police investigation and the arrest of all of the stakeholders, the police created a situation in which the boy became a burden to those holding him on behalf of the criminals. Contacts on behalf of the police were directed to those holding the boy and retrieved him. Karim will undergo medical examination and then returned to his family. The Israel Police will bring to justice all of those involved in the kidnapping."
Karim was playing with a young relative outside his home on Tuesday when a vehicle pulled up next to them. The driver asked the boys a few questions before a masked man emerged from the vehicle and forced Karim into the car. They then fled the scene. Karim’s friend then ran into the family's home screaming “a kidnapping!”
Karim's father, Jabar, said the kidnappers demanded a ransom of NIS 4 million in return for his son.
Police suspect the kidnappers arrived in Qalansawe with two vehicles with the same license plate. After the kidnapping, one vehicle went south and the other turned north. At first, police thought Karim was in the vehicle that headed north, but it later transpired that he was in the other vehicle.
After learning Karim was kidnapped to the Palestinian Authority, Police Commissioner Alsheikh said Friday he was holding the PA responsible for his safety and well-being.
Due to the complexity of the affair, the Shin Bet, the Palestinian police and criminal elements from Israel's Arab sectors joined the search effort.
On Thursday, the Rishon LeZion Magistrate's Court extended the remand of Ahmed Nakib, the main suspect in the kidnapping, and of three other suspects, by seven days.
The four are suspected of kidnapping for the purpose of committing murder or extortion and of conspiring to commit a crime.
Nakib denied involvement in the kidnapping, saying, "I have no hand or foot in it, I have no idea why they attacked me, I don't know the child, they just arrested me."