CCTV footage of the incident shows a woman with long dark hair shooting the men at point-blank range as diners scrambled for cover. A policeman was also injured in the incident, according to Mexico's official Notimex news agency.
The Israeli Embassy identified the two men as Alon Azulay, 41, and Benjamin Yeshurun Sutchi, 44.
The alleged suspect, who has been identified only as "Esperanza N," was arrested as she was trying to flee the scene. By Mexican law, the full name of suspects in an investigation are not made public.
In a statement to the Homicide Prosecutor's Office on Wednesday, the suspect suggested that the shooting was a crime of passion, according to police.
On Thursday however, the Mexico City Attorney General's office confirmed that the double murder was a coordinated attack with implications to an underground network of Israeli criminals.
In a statement, the Israeli Embassy in Mexico said that Azulay and Sutchi had criminal records in both Israel and Mexico but did not provide providing any other details on those crimes. The statement added that they were collaborating with Mexican authorities in the investigation.
Mexico's Secretary of Security and Citizen Protection Alfonso Durazo Montaño said however, that contrary to the Israeli embassy's statement, Mexican authorities say the Israelis did not have a criminal record in Mexico.
Speaking at his daily press conference on Friday, President Andrés Manuel López Obrador said that the Attorney General's Office was investigating the matter.
"It was not a passion case, like reported earlier," he said. "This is related to organized crime and I'll leave it at that."
Montaño later said that the murdered Israelis had links with money laundering bands in Mexico, Notimex reported.
Gabriel Regino, criminology professor at the National Autonomous University of Mexico (UNAM), said in a series of posts on Twitter that Sutchi had allegedly betrayed Erez Akrishevsky, an Israeli criminal "with strong ties to such organizations in his country and in other regions of the world," who had escaped from prison 18 years ago and had been in hiding in various countries.
Akrishevsky arrived in Mexico "with the protection of some organizations," Regino said.
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