Prime Minister Benjamin Netanyahu, in full campaign mode ahead of April 9 polls, on Sunday said Israel "was not a state of all its citizens" in a reference to the country's Arab population.
The prime minister, in comments on Instagram, went on to say all citizens, including Arabs, had equal rights, but referred to a deeply controversial law passed last year declaring Israel the nation-state of the Jewish people.
"Israel is not a state of all its citizens," Netanyahu wrote in response to comments from an Israeli actress.
"According to the basic nationality law we passed, Israel is the nation-state of the Jewish people -- and only it.
"As you wrote, there is no problem with the Arab citizens of Israel. They have equal rights like all of us and the Likud government has invested more in the Arab sector than any other government," he said of his right-wing party.
As the comments caused waves in Israel, Netanyahu again spoke of the issue at the start of a cabinet meeting, making similar comments.
He called Israel a "Jewish, democratic state" with equal rights, but "the nation-state not of all its citizens, but only of the Jewish people".
Netanyahu has been accused of demonising Israeli Arabs, who make up some 17.5 percent of the population, ahead of April polls in a bid to boost right-wing turnout.
He has continually warned that his opponents will receive the support of Arab parties and that they will make significant concessions to the Palestinians.
Netanyahu, under threat of indictment for corruption, is facing a tough challenge from a centrist political alliance led by former military chief of staff Benny Gantz and ex-finance minister Yair Lapid.
The alliance's centrist positions and its security credentials -- it includes three former military chiefs of staff -- have helped it beat back Netanyahu's claims that its leaders are "weak" leftists.
Arab parties would be extremely unlikely to be part of any coalition government after elections.
Arab Israelis are Palestinians who remained on their land after the 1948 creation of Israel and are largely supportive of the Palestinian cause.
Netanyahu leads what is seen as the most right-wing government in Israel's history and says he wants a similar coalition after the upcoming polls.
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