Intra-communal violence has flared in Israel as Jerusalem unrest has spiralled into a conflict in which the Islamist group Hamas has fired rockets from Gaza and Israel has launched air strikes.

Amid the deadly escalation, tempers have flared and mob attacks have sparked warnings of a "civil war".

In Lod, an industrial city near Tel Aviv with drab rows of grey homes with barred windows, 40 percent of the population is Arab, and tensions have exploded into violence for days.

Mussa Hassuna, a 32-year-old Arab-Israeli father, was shot and killed in clashes Monday night. At his funeral Tuesday, protesters torched cars and hurled stones and Molotov cocktails.

Despite a local state of emergency and night-time curfew, Lod was again ablaze Wednesday night, like many of Israel's "mixed" cities, also including Haifa and Acre, where a Jew was seriously injured by stone throwers.

Israeli President Reuven Rivlin, who celebrated a Ramadan "iftar" meal just weeks ago, on Wednesday condemned what he termed a "pogrom" by a "blood-thirsty Arab mob".

Hours later, a far-right Israeli mob was shown on live TV savagely beating a man they believed to be an Arab as he lay motionless on the ground, on the seafront promenade of Bat Yam, south of Tel Aviv.

'Things have changed'

Outside the charred Lod synagogue, Yoel Frankenburg, 34, remains furious.

"The Arabs are trying to kill us!" he said. "And why they want to kill us, I have no idea!

"I've been living here for 12 years and most of the time I've been a good neighbour.

"They attacked me, they threw stones at me... I had to send my children out of town," he added, saying the five children were now staying with their grandparents.

He said several Jewish families had their guns ready, because "the police do nothing".

Arabs say families like Yoel's are no different than the Jewish nationalists who settle in the occupied West Bank.

"Things started to change about 10 years ago, when extremist groups began to move into the neighbourhood," said Wael Abo Sharkh, an Arab resident.

"As soon as these extremists started to arrive, things changed."

Many of Lod's Arab citizens accuse the mayor's office of facilitating the influx of "extremist" Jews.

Outside the local courthouse, dozens of Israelis held a demonstration Wednesday in support of three Jews arrested in connection with Hassuna's killing.

A semi-automatic weapon slung over his shoulder, Meir Layosh marshalled the crowd with a loudspeaker while cradling a baby in a stroller.

"We're not violent... but we have to protect ourselves against terrorists and anti-Semites," said Layosh.

"These people don't want us here. But I have a message for them: We're staying put."

'Nothing justifies lynching'

Amid the rising brutality, there have been warnings to pull back from the brink.

Issawi Fredj, an Arab deputy from the left-wing Meretz party, said the images of the Bat Yam beating were a sign the country was heading towards "civil war".

Prime Minister Benjamin Netanyahu said in a statement that "what has been happening in the last few days in the cities of Israel is unacceptable".

"Nothing justifies the lynching of Arabs by Jews and nothing justifies the lynching of Jews by Arabs."

Israel's chief Sephardic rabbi Yitzhak Yossef called for an end to attacks by Jews.

"Innocent citizens are being attacked by terrorist organisations," he said. "The heart is heavy and the images difficult, but we cannot allow ourselves to be drawn into provocations and aggressions."

Opposition leader Yair Lapid, who is now tasked with forming a government after March elections, said that "the rioters in Lod and Acre do not represent Israeli Arabs, the rioters in Bat Yam... do not represent Israeli Jews.

"Violence will not dictate our lives".

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