Israeli Supreme Court Satisfied with Partial Inclusion of Arab Towns in Wadi Ara as National Priority Areas, Rejects Petition to End Discriminatory Criteria for Housing and Development Benefits

After partial success, on 22 June 2025, the Israeli Supreme Court rejected a 2020 petition filed by Adalah – The Legal Center for Arab Minority Rights in Israel and the Arab Center for Alternative Planning (ACAP), and Arab towns in the Wadi Ara region, challenging their exclusion from classification as government-designated National Priority Areas (NPAs) for housing and development benefits. The petition argued that the exclusion was discriminatory and based on arbitrary administrative divisions, specifically, the use of the “district peripherality criterion”, which calculates average peripherality across an entire sub-district and bars disadvantaged towns from qualifying on an individual basis.

The decision came after nine of the petitioning towns (Umm al-Fahem, Zalafa, Musheirifa, Musmus, Salem, Bayada, Barta'a, Mu'awiya, and Ayn al-Sahla) were included in the NPA lists following the petition, leaving the remaining towns (A’ra, ‘Ar’ara, Jath, Kufr Qare’a, Meisar, Baqa al-Garbiyah, Umm al-Kutuf, and El Aryan) without remedy, despite being in similar need.

The Court held that the petitioners had not provided sufficient factual basis to demonstrate either discrimination or arbitrariness and concluded that the state’s use of the district-based standard was “reasonable and non-discriminatory in purpose or effect.” The Court wrote, “The petitioners’ argument is based on a narrow comparison between a number of towns. The data does not point to any systematic, intentional or outcome-based discrimination in determining NPA designations.”

    CLICK HERE to read the [Hebrew] decision

    CLICK HERE to read more about the petition

This case involves two tiers of government decisions. The first, the geographic periphery map (Decisions 3738 and 919), grants broad state benefits — such as enhanced state funding, infrastructure projects, development grants, and subsidized programs — to towns classified as NPAs. None of the petitioners were included under either map, despite evidence of socioeconomic deprivation and spatial shortages. Their exclusion reflects the operation of the peripherality threshold, not any principled standard. The second pertains to targeted housing and construction benefits. Decision 561 (2023), for the first time, and following the petition, included nine Arab towns based on their low social-periphery index classification. Other Arab towns remain excluded. A subsequent amendment, Decision 1069, maintained this status quo.

The ruling relies on a narrow, formalistic analysis that evades Israel’s constitutional obligation to uphold substantive equality. The Court accepts the state’s argument that most towns in the Hadera sub-district—Jewish and Arab alike—are generally excluded from the geographic periphery map, and therefore concludes that there is no discrimination. But this reasoning misses the core legal issue. The petitioners argue that the discrimination arises not only from the outcome in individual cases, but also from the design of the criterion itself. The petitioners consistently argued that the proper comparator group is not other excluded towns, but those towns—primarily Jewish—that were included in the NPA lists despite having similar or  higher socio-economic rankings. This group includes towns like Afula, Yokneam, Givat Oz, and others. The Court dismissed the petitioners’ comparative data as “partial” without addressing the glaring disparities they revealed.

The petitioners emphasized that the exclusion of the Arab towns is not a byproduct of neutral criteria, but the result of a specific, unjustified threshold applied selectively. The “district peripherality criterion” has operated as a barrier for Arab towns, while numerous Jewish towns have received benefits either through special exceptions or other criteria.

Background

• August 2020: Adalah and ACAP filed the petition to the Israeli Supreme Court on behalf of all Arab local authorities in Wadi Ara and 74 area residents, challenging the 2018 government decision to designate over 500 towns—primarily Jewish, including illegal West Bank settlements—as NPAs for housing, while excluding Arab towns. Read more

• April 2021: The Supreme Court issued an order nisi, requiring the state to explain the exclusion. Read more 

• July–November 2022: The state submitted an updated decision, continuing to exclude the Arab towns using new eligibility criteria. Adalah and ACAP submitted an additional response and appeared for a hearing in November 2022. Read more 

• July 2023: The government issued a revised NPA list in which it included nine Arab towns in Wadi Ara, for the first time, but continued to apply discriminatory, arbitrary standards. As a result, some petitioners remain excluded from benefits granted to nearby Jewish towns with higher socio-economic status. The petitioners therefore requested that the Court accept the petition or schedule another hearing. Read more

• July 2024: After the state requested dismissal of the petition due to changed circumstances, the Court held a hearing. The petitioners reaffirmed their claims and submitted a map comparing towns excluded from the NPA list. The Court then ordered the state to provide an updated response addressing distinctions between the towns. Both parties then filed several updates and responses. Read the petitioners’ most recent response, dated 27 April 2025, here. 

In response to the ruling, Adalah and ACAP commented:

“The petition led to the historic inclusion of nine Arab towns in Wadi Ara in the NPAs list. However, the Court’s refusal to grant remedy to the remaining towns is deeply troubling. Despite clear and uncontested evidence that these Arab towns face severe socioeconomic deprivation—often more so than nearby Jewish towns already classified as NPAs—the Court chose to side with the state. By accepting technical justifications and turning a blind eye to blatant discrimination against Palestinian citizens, the Court has effectively endorsed a policy that systematically excludes Palestinian towns in Israel from critical housing and development resources.”

Case Citation: 5510/20, Umm al-Fahm Municipality et al. v. The Prime Minister of Israel