Toulouse Massacre Update- Neo-Nazi Former Soldiers Cleared; French Authorities Corner Algerian al Qaeda Operative

In the hours after yesterday's killing spree in front of a Jewish school in southwestern French city of Toulouse, investigators had focused their attention on three former soldiers in the French Army who were neo-Nazis and had also served in the same unit as the three soldiers who were gunned down at an ATM earlier this month.

According to reports published Monday, French police investigating the fatal shootings of a teacher and three children at a Jewish school in Toulouse were searching for the three soldiers, who were dismissed from the army a few years ago after being photographed while giving Nazi salutes in front of a Swastika flag.

Monday's deadly shooting came just days after three soldiers — from the same 17th Parachute Engineer Regiment with which the dismissed trio served — were shot dead in broad daylight in Montauban 30 miles away last Thursday. Two of the murdered soldiers were Muslim.

But France Info's report, published Tuesday, said the three neo-Nazis were located by police and cleared of any suspicion. A police official told the website that two of the former troops were interrogated after the shooting attack on the Jewish school, while the third was questioned after the attack in Montauban.

Ynet's correspondent in Toulouse added that according to reports in France, one of the three neo-Nazis voluntarily reported to a police station to be interrogated.

Investigators from the DRCI (Central Directorate of Internal Intelligence) were focusing on 24 year old Mohammed Mera, a French national of Algerian descent who had reportedly travelled to the tribal area in Pakistan's North West Frontier province to fight alongside the Taliban and Al Qaeda.

Merah was reportedly arrested by authorities in Afghanistan for planting bombs and sentenced to 3 years in prison, but was part of a massive April 2011 jailbreak that freed hundreds of inmates and captured Taliban fighters.

The DRCI had reportedly found Mera after checking e-mail correspondence from the first known victim. Mera was reportedly exchanging e-mails under a false account with a French soldier who was gunned down in a residential area of Toulouse earlier this month. Investigators traced the e-mails to a computer using the IP address of Mera's brother. Ballistics experts also conclusively matched bullets used in the school shooting as coming from the same one used to shoot the paratroopers.

On Wednesday morning, Mera exchanged gunfire with heavily armed police officers as they moved in to raid his Toulouse home- which was near the Ozar Hatorah Jewish school. Three officers were wounded and Mera barricaded himself inside his residence as he attempted to negotiate his surrender as the neighborhood was cordoned off.

CCTV footage from the schoolyard massacre also showed the shooter appeared to have some sort of digital camera around his neck to film the attack as it took place. DRCI investigators believe that Mera was ultimately going to post the footage of his attacks online at a jihad website.

Also on Wednesday morning, funeral services were held in Jerusalem for the four victims slain at the school. Rabbi Jonathan Sandler, 30, his sons Arieh, 5, and Gabriel, 4, and 7 year old Miriam Monsonego were laid to rest with at least 2000 mourners present at the massive Gavit Shaul cemetary west of Jerusalem.