The charges were voiced on Friday during a press conference organised by the Islamic Movement in Jaffa, south of Tel Aviv.
The Islamic Movement is considered a leading social and political force among Israeli Arabs who make up about 22% of Israel's total population.
Last week, Jewish extremists threw a pig's head into the courtyard of the Hasan Bek Mosque in Jaffa, offending the Muslim community.
Pigs are considered "unclean animals" by Muslims.
Speaking at the press conference was Shaikh Ra'ed Salah, Head of the Islamic Movement in Israel, accusing the government of "doing nothing and almost saying nothing against the flagrant violations of our holy places by Jewish extremists".
"The Israeli government is first and foremost responsible for these crimes. Yes, the direct perpetrators are the extremists, but the ultimate responsibility lies with the Israeli government."
"In Beir Sheva, they converted the town's mosque into a museum; in Safad, they turned the mosque into a den for prostitutes and drug addicts..."
Shaikh Ra'ed Salah,
Head of the Islamic Movement in Israel
Salah, who was recently released from a 26-month imprisonment for giving humanitarian relief to impoverished Palestinian families in the West Bank and Israel, pointed out that the Israeli state itself was desecrating mosques and refusing to allow Muslims to reclaim and repair them.
"In Beir Sheva, they converted the town's mosque into a museum; in Safad, they turned the mosque into a den for prostitutes and drug addicts and when we raise our voices against these violations of our religion, they label us 'extremists' and 'fanatics'"
Another Islamic leader, Sheikh Shawki al Khatib, Head of the Higher Arab Monitoring Committee, urged Israeli leaders to condemn Islamophobia in Israel as strongly as French President Jacques Chirac has condemned anti-Semitism in France.
"When a synagogue in Paris was desecrated a few months ago, President Chirac went on a nationwide televised programme to warn the French nation against the evils of anti-Semitism."
"Here we see none of this."
A third Islamic leader, Sheikh Ahmed Abu Ajeweh, warned that Jewish extremists might perpetrate a huge massacre of Israeli Arabs if the government maintained it "present policy of appeasement towards them."
During the conference, the leadership of the Islamic Movement announced that "vulnerable mosques" located in or near mixed towns, like Jaffa, Lud and Haifa, would be guarded 24 hours a day.
Earlier, the Israeli Shin Beth, Israel's chief domestic agency, announced that two right-wing Jewish extremists had been arrested for placing the pig's head at the Jaffa mosque.
Jewish extremists tried to
prevent Israeli Gaza pullout
The two reportedly confessed to having perpetrated the act in an effort to thwart Israeli withdrawal from the Gaza Strip.
According to the Israeli state-run radio, the two, a man and a woman, told police they hated the Arabs so much and wanted to cause riots that would slow down the implementation of the pullout or stop it entirely.
The suspects also said they were planning to throw another pig's head into a mosque on Friday night, and police reportedly found the head in a refrigerator during a search of the suspects' homes.
An Israeli police spokesman denied charges that the police were not acting decisively against attacks on Islamic holy places by Jewish extremists.
"This is not true, I assure you we are doing all we can to enforce the law. But, yes, unfortunately, like all police forces around the world, we don't always succeed in preventing certain incidents from happening."