Israel is considering banning the radical wing of the Islamist Movement over its ties with Hamas, Prime Minister Benjamin Netanyahu said on Sunday.
The Islamic Movement in Israel was founded in the early 1970s and subsequently split into two branches, the radical northern faction and its more moderate southern counterpart.
Speaking to ministers at a weekly meeting of his cabinet, Netanyahu said Israel was considering a ban on the northern branch.
"It constantly preaches against the State of Israel, and its people publicly identify with terrorist organisations like as Hamas," he said, accusing the northern chapter of being behind a weekend rally at which demonstrators allegedly called for the kidnapping of Israeli soldiers.
"Therefore, I directed the relevant authorities to consider declaring the northern branch of the Islamic Movement an illegal organisation. This would give the security authorities significant tools in the struggle against this movement," he said, his remarks communicated by his office.
Hundreds of Arab Israelis rallied in the northern town of Umm al-Fahm on Friday in protest against a major West Bank arrest campaign triggered by the disappearance of three Israeli teenagers on June 12.
Israel has accused Hamas of kidnapping them, and has staged a crackdown on the Islamist movement in the West Bank. So far, five Palestinians have been killed and more than 400 arrested, two thirds of them Hamas members.
Netanyahu accused the demonstrators of making "outrageous calls" for the kidnapping of Israeli soldiers.
"We cannot accept infuriating calls to abduct IDF soldiers. In many cases, those behind such calls and demonstrations are from the northern branch of the Islamic Movement," he said.
"Most Israeli Arabs do not take this view and I call on their leaders to be courageous and strongly condemn such calls."
But his threat was dismissed by the movement's leadership.
"We are not afraid of these threats," it said in a statement.
"It is clear that Netanyahu, with his blind insistence on outlawing the Islamic Movement, doesn't need any reason to incite against the movement."
The movement is tolerated in Israel but is under constant surveillance because of its perceived links with Hamas, which controlled ruled the Gaza Strip for the past seven years, but relinquished its political hold on power with the formation of a joint administration this month.
Since June 18, Sheikh Raed Salah, a firebrand preacher who heads the movement's northern wing, has been banned from leaving the country for "security reasons".
The Islamic Movement draws support from the 160,000 Palestinian Arabs who remained on their land when Israel was established in 1948. Now known as Arab Israelis, they number around 1.4 million, or some 20 percent of Israel's population.