For nine years, an Arab family, the Kadans, who live a short distance away in the Israeli Arab town of Baqa al-Gharbiya, have been fighting through the courts to be allowed to join the Jewish community.
Katzir sits high on a hill just inside Israel that overlooks the rolling landscape of the northern West Bank close to the Palestinian city of Jenin.
It is one of hundreds of exclusive Jewish communities in Israel which are built on state land and that weed out Arab applicants, unofficially, through strict vetting procedures.
Adil Kadan, a nurse at a hospital in Hadera, applied to buy a plot of land in Katzir in 1995 on which to build a home.
He says he was fed up of living in the "third world conditions" of overcrowding and squalor in Baqa and wanted a better life for his four daughters.
The differences between Katzir and Baqa are stark: the Jewish community, home to a few dozen families, has government-subsidised houses, flowerbed-lined roads, a public park, play areas and a swimming pool, as well as a community centre and theatre.
Baqa, home to 25,000 Israeli Arabs, can boast little more than houses and shops, with buildings crammed into every available space.
There are no pavements or parks, while the roads are potholed and regularly fill with sewage.
Sharon's government continues to
support past apartheid policies
The crumbling temporary classrooms of the school which the Kadans' children attend leak rain in the winter and asbestos all year round.
Nine years ago, Katzir's council refused a building plot to the Kadans as such councils have always done with Arab applicants, on the grounds that the family was "unsuitable".
But uniquely, Adil launched a legal battle to overturn the decision.
In 2000, under intense international pressure, the Supreme Court reluctantly ordered Katzir to look at the Kadans' case again. The council, however, effectively chose to ignore the ruling.
A human rights lawyer for the family, Dan Yakir, says a document he has obtained shows that the community's policy had high-level backing.
Officials of the Jewish Agency, a Zionist organisation that was leasing Katzir's land on behalf of the government, wrote in response to the court's decision: "The right course of action is not to make a noise and just go on doing what we have been doing."
But this week, on the day before yet another court hearing, the Kadans finally got what they wanted.
The Israel Lands Authority, the body charged with overseeing state lands, said it would allocate the family a plot of land.
Katzir's council, meanwhile, is planning to appeal the decision.
"The [Israeli] authority appears to have taken a calculated risk that, on this occasion, it was safer to let one Arab family in. Unfortunately, ... this decision won't help other families."
lawyer, Adalah legal centre
Marwan Dalal, a lawyer with the Adalah legal centre for Israel's Arab minority, said the Lands Authority had changed its mind fearing that two decisions against it by the court might set an uncomfortable legal precedent.
"The authority appears to have taken a calculated risk that, on this occasion, it was safer to let one Arab family in.
"Unfortunately, despite what the Israeli media may suggest, this decision won't help other families. They will have to be prepared to carry out a long, expensive and arduous battle to win the right to live where they choose," Dalal said.
Human rights campaigners believe that the Katzir ruling has done little to change the apartheid reality for the country's 1.3 million Palestinian citizens in a state that owns and controls 93% of land - not on behalf of Israeli citizens but for Jewish people around the world.
Over decades, land belonging to Arab towns and villages has been confiscated to be held by the state for the day it may be needed for the settlement of new Jewish immigrants.
Unequal allocation of, and access to, land is just one of the many features of the systematic discrimination suffered by the Palestinian minority.
"Every time Israel is subjected to scrutiny by United Nations' committees checking its implementation of the human rights treaties it has ratified, it fails ignominiously," said Muhammad Zaidan of the Arab Association of Human Rights (HRA) in Nazareth.
An Arab council negotiator in
Beaneh was beaten by police
"And it fails most spectacularly in relation to its treatment of the Palestinian minority."
A report published by the HRA this week throws light on two pressing problems faced by the Arab minority: police brutality and house demolitions.
It provides testimonies from several victims of a violent police rampage through the village of Beaneh in the Galilee as five homes were demolished in late February.
Men, women and a delegation of council officials trying to negotiate with the police were so severely beaten that several ended up in hospital with broken bones, fractured skulls and internal bleeding.
The demolitions and violence are far from isolated incidents.
According to figures recently supplied by the Israeli Committee Against House Demolitions, 500 Arab homes outside the occupied Palestinian areas of the West Bank and Gaza were destroyed last year by the Israeli authorities.
Permits have become almost impossible to obtain for Arab citizens, who are therefore forced to build illegally.
US-made munitions were found in
Beaneh after the Israelis left
And most weeks, reports surface of an Israeli Arab youth arbitrarily arrested or assaulted by police, or of an Arab citizen shot by police.
Mossawa, a political lobbying group, is demanding the investigation of at least 14 cases in which unarmed Palestinian citizens were shot dead by the police since the start of the second Intifada.
Those deaths follow the killing of 12 Palestinian citizens and a man from Gaza by Israeli police during demonstrations at the start of the intifada, in October 2000.
A state commission of inquiry under Justice Theodor Or, which investigated the killings, identified a culture of profound racism at all levels of the police.
The inquiry concluded: "The police must realise that the Palestinian Arab sector in Israel is not the enemy and must not be treated as such."