It is mixed housing. There are no legal restrictions stopping Arabs from living in largely Jewish areas (in fact thousands do http://abcnews.go.com/print?id=8502320) or Jews from living in largely Arab areas. The trouble is that there tend to be poor relations between the different communities in some of the places where the communities are mixed.
Thousands protest outlawing of Islamic Movement in Umm al-Fahm in northern Israel (Haaretz)
from the article: Jerusalem puts two construction plans on hold in wake of U.S. row
A Palestinian teen who tried to stab an Israeli woman in the West Bank was run over and shot to death. Her father, imam of the refugee camp where she grew up, says his daughter was 'responding to the occupation.'04:30 28.11.15 | 1 comments