Prime Minister Benjamin Netanyahu urged the Arab world on Monday to ignore "lies" that Israel was planning to dig under the Temple Mount in Jerusalem, after repeated outbursts of unrest in the capital over the matter.

"Last week extremist figures tried to undermine [Israel's] stability. This is an extremist minority that spread lies about Israel digging under the Temple Mount. This is a lie," said Netanyahu at a cabinet meeting.

He was apparently also referring to rumors spread among Palestinians and Israeli Arabs of an attempt by Israel to harm the Islamic holy sites in the compound, which contains the Al-Aqsa Mosque.

In a direct address to the Israeli Arab community, Netanyahu said: "You are citizens with equal rights; we want to live together in coexistence and bring our children prosperity."

The head of the Islamic Movement's northern branch, Sheikh Ra'ad Salah, told an Arab television station last week that the "Israeli occupation seeks to build a synagogue on Al-Aqsa Mosque."

The Israel Police subsequently arrested Salah, after the State Prosecutor ruled that his statements could be seen as endangering the peace in the capital; he was later released.

Ben-Eliezer: Israeli Arabs are starting to link up with Hamas

Also Monday, Trade and Labor Minister Benjamin Ben-Eliezer warned that Israeli Arabs were beginning to link up with Hamas against Israel.

"A certain alliance is forming between Israeli Arabs, specifically the Islamic Movement's Northern Branch, and Hamas," Ben-Eliezer told Israel Radio, adding that Israel would eventually "pay a heavy price if this cooperation is permitted to continue."

The only way to thwart such an alliance, Ben-Eliezer continued, would be to "accelerate the diplomatic process."

"A breakthrough in talks isn't a Palestinian priority, but is first and foremost in Israel's interest in terms of both security and its very existence," the Trade and Labor minister added.

Ben-Eliezer also said he felt Israel should continue along policy lines set by Netanyahu, only in "a much more assertive manner."

"The guidelines the prime minister should set are to accelerate talks, initiate a wide range of measures meant to improve life in the West Bank, and aid [Palestinian President] Mahmoud Abbas," Ben-Eliezer said.

Referring to Abbas' reputed lack of influence among Palestinians, Ben-Elizer said that Israel should still continue dealing with the Palestian leader.

"For now we must sit and talk with Abbas. That's what we have to work with now," Ben-Elizer said, adding that Israel "should sit with him and try to get the process going."