Taher Lala, 27, of Jaffa was shot as he sat at the wheel of a car, the Jerusalem Post reported. Police said Lala had a criminal record and the killing may have been the result of an underworld feud in Jaffa, an ancient port next to Tel Aviv.
The shots were fired from a passing car.
Thousands of people attending the Chocolate Festival at the Hatachana shopping complex heard the gunfire, Ynetnews reported.
"We thought it was a terror attack," one woman who was at the shopping complex with her two children said. "There was mass hysteria."
Lala was the fourth person killed in less than two weeks in the Tel Aviv area in apparent mob violence, the Post said.