Tom's mother, Jocelyn Hurndall, also criticised the decision. She told a radio station that it showed Israel was more concerned with herself than the pursuit of justice.
Mr al-Heib, a former Israeli soldier, was jailed in 2005 for manslaughter, obstruction of justice and giving false testimony. He was sentenced to eight years for the "unlawful killing" of the 22-year-old.
But an army committee said he had changed, was no longer a threat and agreed to release him.
The committee’s decision to grant early release came despite warnings from Israel’s Military Advocate General that it would hurt relations between Israel and the UK.
A spokesperson for the British Foreign Office said: “We recognise the grief this decision will cause to the Hurndall family.