The court heard a petition brought by the Adalah Arab-rights advocacy group. Adala claimed a double standard in a state plan to finance educational institutions in areas given the status of “national priority” by the government – most of which were Jewish towns.

According to the court, 500 Jewish communities have received such status, while only four Arab ones have. “This gave rise to suspicions that the distinctions were based on race and nationality,” Chief Justice Aharon Barak said.

The Supreme Court declared that all definitions of “national priority areas” made by the government would be annulled. "The government's decisions were flawed, clearly discriminated against Arabs and damaged equal rights," said Barak.

The court decision also opened the door for future petitions by Arab municipalities demanding equal assistance from the government in the Galilee and Negev, where Israel has planned to invest in Jewish settlement to balance out the Arab demographic rule in those areas. "All government plans will be checked for equality between the various sectors," read the verdict.

"Equality is the common denominator and the basis of all human rights and other democratic values,” said Israeli-Arab Justice Salim Jubran. The verdict demanded that the government set clear criteria defining “national priority areas” which are to receive government assistance.

Arab MK Ahmed Tibi (Ra’am-Ta'al) applauded the ruling and called for its immediate implementation.

The ruling strikes yet another blow at government efforts to settle the Galilee and the Negev. Recruiting young idealists willing to move to outlying communities in those regions has proven to be difficult, following the perceived betrayal of those who settled in Gaza less than a generation ago who were forcibly removed from their homes and are currently residing in temporary pre-fab housing and hotels.

MK Rabbi Avraham Ravitz (UTJ) slammed the court decision from a different angle, pointing out that the court is quick to cry “discrimination” when the Arab community is targeted, but repeatedly sets a double standard when dealing with aid to schools affiliated with the hareidi-religious sector.