Prime Minister Ehud Olmert on Wednesday decried the "deliberate and insufferable" discrimination against Arabs at the hands of the Israeli establishment, during an appearance before a Knesset panel in Jerusalem.

The gap between the proportion of Arab citizens in Israel and their inclusion in the state's civil service positions "arouses concern and unrest," the premier told a parliamentary commission of inquiry examining the issue.

Among the more prominent members of Knesset comprising the committee are MKs Ahmed Tibi (United Arab List - Ta'al), Reuven Rivlin (Likud), and Shachiv Shnaan (Labor).

Panel members say that during the address, Olmert reiterated his past statements according to which discrimination against the Arab minority is the result of years of neglect.

"I feel uncomfortable with the fact that the state for many years acted improperly and should have made fundamental changes," the prime minister said.

"We have not yet overcome the barrier of discrimination, which is a deliberate discrimination and the gap is insufferable...A cycle has been created whereby on the one hand, the Arab population did not know how to establish a proper management system and on the other hand governments have denied them their rights to improve their quality of life."

By law, Arab citizens are entitled to a gradually increasing number of state employment opportunities. Last year, the government approved a measure mandating that 8 percent of all civil service jobs be manned by Arabs in 2010. The target for 2012 is 12 percent.

Nonetheless, there are government agencies who employ a miniscule number of Israeli Arabs, among them the Bank of Israel and Israel Electric Company.

"There is no argument that there were ministries and offices that did not accept Arabs," Olmert said on Wednesday. "It's terrible that there is not even one Arab employee at the Bank of Israel and at the Electric Company Arab workers represent less than one percent of all employees."

The chairman of the committee, MK Ahmed Tibi, said that during the course of its work the panel discovered a disturbing gap between the percentage of Arab citizens in Israel and the proportion of Arab employees in the public sector.

"The inclusion of Arab citizens in the public-private sector is a moral statement that must be realized," Tibi said. During the session on Wednesday, Tibi proposed that the government implement a mechanism that would expedite the process of hiring Arab workers in civil service jobs, including those in senior positions such as deputy director general and branch chairpersons.