The Israeli parliament gave preliminary approval Wednesday to a bill defining the country as the "national home of the Jewish people" that critics say discriminates against the state's Arab minority.

The bill, supported by 48 against 41 of the Knesset's 120 members, seeks to "defend [Israel's] status as a Jewish and democratic state", said Avi Dichter, the bill's sponsor, of the ruling Likud party.

It needs to be debated by a parliamentary committee and voted on three more times in the plenum before it becomes part of the country's so-called "basic laws" which are similar to a constitution.

A similar bill failed in 2014. Critics slam the bill as discriminatory against Israeli Arabs, who make up more than 20 per cent of Israel's population of 8.7 million, as well as other minorities. If passed, critics say it could undermine Israel's balance of being both a Jewish and democratic state by harming the rights of the country's minorities.

Some 17.5 percent of Israel's population are Arab, and are descendants of Palestinians who remained after Israel's creation in 1948. Public signs and government services are typically in Arabic as well as Hebrew, but it was unclear if the new bill would change that. Prime Minister Benjamin Netanyahu's government is seen as the most right-wing in the country's history, and Arab Israelis allege widespread discrimination.