In a shocking re-enactment of Nazi Germany practices, Palestinian construction workers were forced to wear distinguishing marks on their hard hats to differentiate them from other nationalities.
As a constitutional committee of the Israeli parliament, the Knesset, met in Jerusalem this month to discuss how best to express the values of Israel as "both a Jewish and democratic country", construction workers outside were building a new wing of the building.
All the Arab labourers wore white hard hats, but on some of the helmets a large cross had been sprayed in red paint.
It was later revealed that security officials had demanded the workers be marked to distinguish them from builders imported from countries such as China and Thailand.
According to reports in the Israeli media, the crosses were being used by snipers posted on the Knesset rooftop to train their sites on the Arab workers and follow them around the building site.
An official said the crosses would be removed once lengthy security checks had been completed on the workers.
The row soon reached the parliament floor, where Arab Knesset members expressed outrage at the tagging system.
Referring to the markings put on Jews under Nazi persecution, Isam Makhul said: "I have no problem with security needs but this kind of marking is insufferable. If it isn't removed, I will insist that it be replaced with a yellow patch."
Fears of 'terrorism'
After a stormy debate, during which a rightwing cabinet minister Avigdor Lieberman accused the Arab Knesset members of being "terrorists", the Speaker ordered the practice of marking the hats be halted.
"I have no problem with security needs but this kind of marking is insufferable. If it isn't removed, I will insist that it be replaced with a yellow patch"
Arab Knesset member
He added he hoped his decision would not lead to the Arab workers losing their jobs instead.
Such hopes may be unrealistic, according to Jafar Firah of the Arab minority's political lobbying group Mussawa.
He says there has been a wave of discrimination in the workplace against Israel's Arab citizens - 20% of the population - based on unfounded fears among Jews that they are linked to Palestinian "terrorism".
In fact, despite a hysterical campaign by the Israeli media backed by comments from leading cabinet ministers, the involvement of the Arab minority in Palestinian attacks has been mainly restricted to taxi drivers who have unwittingly driven human bombers to Jewish areas.
The backlash against Arab citizens has been particularly evident in the workplace.
One prominent case involves Abir Zinaty, a 20-year-old student from the mixed Arab and Jewish city of Ramle who was fired from her local branch of McDonald's in late December.
She claims she was fired for speaking Arabic which, along with Hebrew, is an official language of the state.
Zinaty says her supervisor, Hazim Natshe, an Arab from East Jerusalem, ordered staff not to speak Arabic while on duty and himself insisted on speaking Hebrew at all times, even when alone with other Arab workers.
Many Israeli Jews consider Arab
Israelis to be a ''fifth column''
"The general view among the Arab staff was that he had been told by head office to stop Arabic speaking in the restaurant," she said.
"Maybe the company is scared Jews will not come if it is made too obvious to them that they are sitting next to Arabs."
Zinaty says she had been expecting to hear of a promotion when she was called in by Natshe on her day off. A few months earlier, she had been awarded the title of Excellent Worker 2003.
She said: "When he fired me - even though only the two of us were in the room - he spoke the whole time in Hebrew. It was crazy - an Arab telling another Arab that she was fired in Hebrew.
"I was confused and so scared to reply in Arabic that I left without saying anything to him."
McDonald's Israel has insisted Zinaty was not fired for speaking Arabic and that staff members are allowed to speak whatever language they choose, except when placing food orders to the kitchen.
They accuse Zinaty of answering back to her superiors and of taking extended rest breaks.
"Many workplaces ban Arabic because they don't like being reminded that their Jewish state is full of Arabs too"
member, Labourer's Voice
However, when the labour, welfare and health committee of the Knesset examined her case, they concluded McDonald's account was not plausible.
The chair of the committee, Shaul Yahalom, severely criticised McDonald's for sacking Zinaty without instituting a disciplinary procedure.
Despite demands from the Knesset that Zinaty be reinstated, so far McDonald's Israel and McDonald's Corporation in the United States have refused to talk to her.
Instead, a spokesman for the headquarters in the US, Julie Pottebaum, has stated that only Hebrew be spoken "in order to best conduct business and best serve our customers".
Such a policy appears to violate Israel's equal opportunities in employment law, which outlaws discrimination on the basis of race or nationality, as well as contradicting McDonald's stated commitment to promoting ethnic diversity and tolerance.
Arabs in Israel
As far as is known, Israel is the only country in the world where McDonald's staff is ordered to talk only one language while on duty.
The "discomfort" Israeli Jews feel at hearing Arabic is well known to the Arab minority, said Wahba Bidarna of the Labourer's Voice, an Arab workers' pressure group.
"Many workplaces ban Arabic because they don't like being reminded that their Jewish state is full of Arabs too."
Palestinians working on Israeli
settlements also feel pressure
Such discrimination dates back to the earliest days of Zionism, he said, when the movement's leaders argued that Palestine was "a land without people for a people without land".
The first Jewish immigrants began a policy of "Hebrew labour" - only employing other Jews.
The country's trade union federation, the Histadrut, has had a dismal record of defending Arab workers' rights, Bidarna said.
"During the Intifada, discrimination against the Palestinian minority has grown significantly, widening to include sacking Arab workers because it is felt Jewish customers do not want to see Arabs near them."
Bidarna has been fighting on behalf of an Arab catering manager who was sacked from the Nirvana hotel on the shores of the Dead Sea after he refused to dismiss 40 Arab workers.
The Nirvana's bosses apparently told the catering manager that guests had been complaining about the presence of Arabs in the hotel.
However, they feared bad publicity and legal challenges if they sacked the workers themselves.
In another of Butana's cases, Arab employees of the National Insurance Institute in Nazareth have filed a petition against the office's director, Moshe Nun, claiming that since his appointment three years ago he has sacked 19 Arab workers while at the same time hiring 27 Jews.
A report published in January by the Adva Centre - a Tel Aviv group promoting equality and social justice - showed that the 36 worst employment black spots in Israel are all Arab areas.
Even after government manipulation of the figures to lower the percentages of joblessness among Arab citizens, Arabs are still more than twice as likely to be unemployed as Jews.