The team, called Bnei Sakhnin, are carrying aloft the hopes of the Jewish state.
But as Sakhnin romped home to a 3-0 victory in their first match, against the Albanian side Partizani Tirana, in a sultry Tel Aviv stadium last week, few Israelis were cheering them on.
A mere 2,000 fans turned out at the national stadium in Ramat Gan.
Most of Sakhnin's 22,000 residents were loath to leave the relative safety of the country's northern Galilee region and venture into Tel Aviv, where there is a general mood of hostility towards Arabs, for the early stages of the competition.
And Israeli Jews appeared equally reluctant to wave the Star of David flag in support of an Arab team.
However, since Sakhnin earned their place in the UEFA competition by winning the State Cup in May against a Haifa side, the Israeli media has been arguing that the victory reflects a new atmosphere of coexistence between the country's Jewish majority and its one million Arab citizens.
Sakhnin's Calber Rodriguez (R) in
a recent UEFA qualifying match
After last week's match, reporters crowded around the club's Jewish coach as he announced: "This team is making history and I want to be a part of it, that's why I came [to Sakhnin]."
In fact, relations between Jews and Arabs have rarely been worse. The first annual report by the Haifa-based Mossawa Centre on racism against Arab citizens was published last week and documented hundreds of instances of discrimination, racially motivated violence and hate speech by Jews.
It noted that 15 unarmed Arab citizens have been killed in mysterious circumstances by the security forces in the past four years, since the killing of 13 Arab citizens at the start of the intifada. It also cited 10 recently passed racist laws and 15 examples of anti-Arab incitement from Jewish public figures.
Mossawa's director Jafar Farah observed: "This should be a signal that if we don't want to have civil confrontation - if not war - between [Jews and Arabs], we have to act."
One of the disturbing trends noted by Mossawa are racist chants at football matches, particularly since Sakhnin and another Arab squad, Nazareth, qualified for the premier division last season.
In June the first football fan was convicted of shouting "Death to the Arabs" at a match in Jerusalem.
"This is the biggest problem of Sakhnin. Jewish companies don't sponsor Sakhnin. No one from the Jewish business community said: 'Let's take Sakhnin and make it a symbol for peace, for living together'"
sports writer Yoav Goren,
Yosef Cohen, aged 33 and a supporter of Jerusalem Beitar, told police after his arrest: "I said 'Death to the Arabs' because that's what I felt at the time. There was nothing to it, just like you shout 'Go Beitar' you shout 'Death to the Arabs'. There's no contradiction between the two."
Beitar supporters have a notorious reputation for anti-Arab racism and prosecutors in the city have promised to crack down. Six further prosecutions are in the pipeline.
Sakhnin's recent success has outraged Beitar fans. They recently posted an advertisement on the internet announcing "The death of Israeli football".
In contrast, Sakhnin's exploits have attracted the attention of football fans in the Arab world, a break with the traditional ostracism of Israel's Palestinian citizens by other Arab nations, which tend to assume that they have collaborated with the Jewish state.
Several Gulf states are reported to have offered funding to Sakhnin, the poorest club in the Israeli premier division.
Certainly, Sakhnin needs all the help they can get. The only major team without a stadium, Sakhnin have had to use a scrap of cleared land among olive groves for training.
Their municipality, like most other Arab councils, is deep in the red after decades of underfunding from the central government.
Most workers have not been paid for many months and the government has put Sakhnin on a list of eight councils that may be disbanded.
Arab Israeli fans cheer their team
on at the stadium in Ramat Gan
But worst of all for the club is the fact that despite their recent string of successes no Israeli companies want to sponsor them.
"This is the biggest problem of Sakhnin," said Yoav Goren, a sports writer for the daily Haaretz newspaper. "Jewish companies don't sponsor Sakhnin. No one from the Jewish business community said: 'Let's take Sakhnin and make it a symbol for peace, for living together'."
The antipathy towards Sakhnin from Israeli Jews has historical roots. In 1976 Sakhnin won lasting notoriety when security forces quelled protests from residents opposed to a wave of land confiscations that were stripping the town of its last reserves.
In the clashes, six unarmed demonstrators were shot dead by police.
Across much of the Middle East the Sakhnin killings are commemorated each 30 March as Land Day.
In Jewish eyes, however, the town was forever branded a fifth column, or an enemy sympathiser.
Today, overcrowded Sakhnin is surrounded on all sides by a military base, an industrial estate and a string of luxury hilltop Jewish communities, which have been given control of the town's lands.
Despite a population explosion in Sakhnin over the last few decades, the town's land holdings have shrunk from 9000 hectares to 1000.
The Misgav regional council, which represents some 30 small Jewish communities surrounding Sakhnin, has a combined population of 18,000 - 4,000 fewer inhabitants than Sakhnin - but controls nearly 20,000 hectares.
"...where will Sakhnin find the land to build a stadium when we haven't the space for homes, let alone badly needed public facilities such as youth centres, recreation areas and proper schools?"
Engineer Kassem Abu Riya,
"Once Sakhnin was one of the most important farming communities in the region, and now we don't have room even for gardens, pavements or new homes," said Ali Zbeidat, whose own home like many others in Sakhnin is under threat of demolition.
He says he was forced to build illegally on his father's ancient olive groves after his family used up their land in Sakhnin. The Misgav council, which has jurisdiction over the family's olive groves, refused him a construction permit.
When 20 plots of land were recently offered for young families to build a home in Sakhnin, more than 500 families applied.
But it is not only private citizens who are suffering. The local
municipality has been battling Misgav officials for several years to free up enough land to build a football stadium.
Misgav had finally agreed to release 40 hectares to the north of Sakhnin, but last month the courts scotched the plan by awarding the land to a Jewish settlement called Ashbal, set up by a paramilitary group of young settlers.
At least UEFA spared Israeli blushes by declaring that all matches in Israel would be played in Tel Aviv to ensure visiting teams' safety.
Nonetheless, apparently worried by bad publicity, Prime Minister Ariel Sharon stepped in to pledge $2 million for a stadium.
The money is all very well, says Sakhnin engineer Kassem Abu Riya. "But where will Sakhnin find the land to build a stadium when we haven't the space for homes, let alone badly needed public facilities such as youth centres, recreation areas and proper schools?"