Israeli Foreign Minister Avigdor Lieberman proposed that Arab citizens of Israel be offered financial incentives to leave the country and relocate to a future Palestinian state.

Lieberman, whose ultra-nationalist party is a core part of Prime Minister Benjamin Netanyahu’s coalition, has previously spoken about redrawing borders but not about using sweeteners to encourage Arabs to uproot to a Palestinian state.

Lieberman has in the past called on Israeli Arabs, who make up about 20 per cent of Israel’s 8 million population, to take a loyalty oath if they want to remain in Israel, a measure that Netanyahu denounced at the time.

But Netanyahu is now backing a contentious bill that would define Israel as the Jewish nation state and enshrine certain rights for Jews. Critics say it would discriminate against Arab-Israelis and put religion and ethnicity above democracy.