The suspects denied, during a court hearing, involvement in any neo-Nazi activity.
None of the suspects were born to a Jewish mother, the Orthodox definition of a Jew, but qualified for citizenship in Israel under civil law because each had at least one Jewish grandparent, said
Micky Rosenfeld, a police spokesman.
"The cell members adopted Hitler's ideology and created their own unique language which includes music, video clips, insignia, graffiti, and tattoos all depicting Nazi ideology," a police statement said.
"Members of the group would document attacks in which they beat innocent and helpless people who belonged to different minorities," read the statement.
Foreign workers, homosexuals, Orthodox Jews and drug addicts were the main victims of attacks in the Tel Aviv area in the past year.
Cell members also painted swastikas in several synagogues, along with the message that read "Death to the Jews" on a building near one of the houses of worship, the statement said.
Police said the group had "strong ties and connections to other neo-Nazi cells active in Germany and elsewhere overseas".
Amos Hermon, of the Jewish Agency, a semi-governmental group in Israel that assists with immigration, said neo-Nazism in the Israel was a "minor phenomenon".
He said it was likely the alleged cell members were suffering from "immigration shock" and vented their frustrations by expressing "some of the most hurtful sentiments towards the Jewish people".
He also said it was possible the suspects were emulating behaviour they may have witnessed in the former Soviet Union.