Arab towns in Israel strike in protest at funding freeze

JERUSALEM (Reuters) - Arab local councils in Israel held a strike on Monday in protest at the finance minister's freeze earlier this month on hundreds of millions of shekels to their municipalities, a decision that has prompted accusations of racism.

Finance Minister Bezalel Smotrich, a key member of Prime Minister Benjamin Netanyahu's nationalist-religious government, suspended at least 200 million shekels ($52.75 million) of Arab municipal funds, saying that these could end up in the hands of what he called "criminal and terrorist elements".

That the finance minister was casting Arabs as thieves and criminals was "ridiculous" and "false", the mayor of the Arab city of Umm al-Fahm, Samir Mahameed, told Israeli Army Radio.

"This is survival money, not a luxury," said Mahameed, explaining that the funds were meant to assist in fighting soaring crime. "This is a struggle for our lives."

Despite a pledge by Netanyahu on Aug. 9 to release the funds, Smotrich doubled down on his decision, vowing not to "keep turning a blind eye when hundreds of millions of everyone's tax funds were going to criminal groups", in a post on X, formerly known as Twitter, on Monday.

The ultra-nationalist Smotrich's move drew accusations of racism from Arab and Jewish lawmakers, including opposition leader Yair Lapid, as well as Arab mayors.

Arab citizens, most of whom are descendants of Palestinians who stayed in Israel after the 1948 war surrounding its creation, make up about a fifth of Israel's population.

They have for decades faced disparities compared with Jewish citizens, including high poverty rates, overcrowded towns lacking in infrastructure and poorly funded schools, which they say are a result of deliberate government policies.

Israeli Interior Minister Moshe Arbel urged Smotrich to release the funds and voiced support for the municipal strike.

Arab leaders protested outside government offices on Monday. Videos circulating on social media showed police pushing some of the demonstrators, including Arab lawmaker Ayman Odeh.

Protesters chanted "Violent police!" after officers restrained the hands of a woman who lay prone on the ground, her forehead bloodied.

Police said officers were warding off protesters who tried to break into the finance ministry.

($1 = 3.7912 shekels)

(Reporting by Henriette Chacar; additional reporting by Maayan Lubell; editing by Mark Heinrich)