At least four Israeli cities, including the commercial capital Tel Aviv, have banned Arab labourers from their schools, struggling to calm public fears fuelled by the worst surge of Palestinian street attacks in years.
Israel's Interior Ministry, which oversees municipalities, condemned by a party representing the country's Arab minority as racist.
Israel's cabinet also imposed more security measures after further Palestinian stabbings on Saturday, widening police stop-and-frisk powers that will effectively allow them to search anyone on the street.
Forty-one Palestinians and seven Israelis have died in recent street violence, which was in part triggered by Palestinians' anger over what they see as increased Jewish encroachment on Jerusalem's al-Aqsa mosque compound.
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