Israeli Arab minister Ghaleb Majadele said on Tuesday that Israel's plans to construct a new Arab city - the first since 1948 - would strengthen the sectors' "sense of belonging" in Israel.
The sports, science and culture minister added: "The current government has internalized that the Arab population has equal rights."
Interior Minister Meir Sheetrit said on Tuesday during a visit to the Arab city Umm al-Fahm that he is working to lay the foundations for a new Arab city.
Sheetrit said he is "promoting plans for the new city. It will be a modern city, where young couples can afford to buy property and live just like in any other city in the world."
The interior minister is also expected to declare the Arab village of Kafr Qasem a fully-fledged city.
Since the establishment of the State of Israel, not a single new Arab settlement has been established, with the exception of permanent housing projects for Bedouins in the Negev.
About a year ago Hadash MK Hanna Swaid submitted a bill to set up a new Arab city. The proposal was endorsed by 18 left-wing members of Knesset as well as right-wing MKs.
Sheetrit said he had instructed his ministry to complete the planning stage by the end of the current fiscal year.
He also said he intends to accord greater autonomy to settlements with 15,000 inhabitants and above.
During the interior minister's visit, residents asked him to halt demolition orders for unauthorized buildings.
In response, the minister told Umm al-Fahm mayor Sheikh Hashem Abd al-Rahman that he has no jurisdiction to reverse court orders.