The tires of 16 cars were punctured and anti-Arab graffiti was sprayed in an East Jerusalem neighborhood Monday morning, Army Radio reported.
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Police have launched an investigation.
The vandalism took place in the neighborhood of Ein Ilouza, near Silwan, where in addition to the punctured tires, the assailants sprayed racist graffiti reading, "Arab labor" and "Enough of assimilation."
Last week, three settlers were charged with taking part in a so-called unprovoked anti-Arab attack, marking the first indictment for a strike of this sort. "Unprovoked" anti-Arab attacks are described by the Shin Bet security service as those that did not come in response to a settlement evacuation, or other such incident that extremist settlers consider a provocation.
The three men, all in their 20s from the West Bank outpost of Havat Gilad, were charged with torching a car and truck and spray-painting a Star of David on a wall in the Palestinian village of Farata in the northern West Bank in November.
That marked the first time indictments have been issued against any of the 52 Israelis who are suspected of committing "unprovoked" anti-Arab attacks since 2011.