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The ACRI report maintains that over two-thirds Israeli teenagers believe Arabs to be less intelligent, uncultured and violent. Over a third of Israeli teens fear Arabs all together.

The annual report cites ACRI's racism poll, taken in March of 2007, in which 50 percent of Israelis taking part stated they would not live in the same building as Arabs, will not befriend, or let their children befriend Arabs and would not let Arabs into their homes.

Fifty percent of those polled also stated they believed Israel should encourage its Arab citizens to emigrate.

The report includes a section dealing with the recently approved Jewish National Fund bill, which allows Jewish National Fund land—which make up 13 percent of all State owned land—to be allocated to Jews only.

According to the report, Palestinian citizens of Israel are subject to constant racial profiling, which defines them as a security threat, resulting in demeaning and degrading treatment at airports and public venues.

The ACRI says that bills introduced in the Knesset contribute to delegitimize the country's Palestinian citizens, such as ones that would link the right to vote and receive state allowances to military or national service.

They also include bills that require ministers and MKs to swear allegiance to a Jewish state and those that set aside 13 percent of all state lands owned by the Jewish National Fund for Jews only.

"Arab citizens are frequently subject to ridicule at the airports," the report states.

The report goes on to state that Palestinian citizens of Israel "are subject to 'racial profiling' that classifies them as a security threat. The government also threatens the freedom of expression of Arab journalists by brandishing the whip of economic boycott and ending the publication of government announcements in newspapers that criticize its policy."

To look at the whole report (in Hebrew), click here.