The UN Committee on the Elimination of Racial Discrimination said Israel's security measures to ward off suicide bombings and other attacks must be re-calibrated to avoid discrimination against Arab Israelis or Palestinians living in Israeli-occupied lands such as the West Bank.
The committee specified that Israel should ease roadblocks and other restrictions on Palestinians and put a stop to settler violence and hate speech.
Its 18 independent experts, who examined the records of 13 countries at a four-week meeting in Geneva, also said Israel should cease building a barrier in and around the West Bank and ensure its various checkpoints and road closures do not reinforce segregation.
In its conclusions, the committee also voiced concern at an unequal distribution of water resources, a disproportionate targeting of Palestinians in house demolitions and the "denial of the right of many Palestinians" to return to their land.
Differing applications of criminal law between Jews and Arabs had caused "harsher punishments for Palestinians for the same offence", said the committee, whose recommendations are not legally binding.
A high number of complaints by Arab Israelis against police officers are not properly investigated and many Arabs suffer discriminatory work practices and high unemployment, it said.
Excavations beneath and around the Al-Aqsa mosque, Islam's holiest site in Jerusalem, should also be undertaken in a way that will "in no way endanger the mosque and impede access to it", it added.
Israel argues that the UN committee's remit, to ensure compliance with a 1965 international treaty against racial discrimination which the Jewish state has ratified, does not apply to the Palestinian territories it has occupied since 1967. The committee rejects that position.
Israel's ambassador to the United Nations in Geneva, Itzhak Levanon, told the committee last month it was crucial to understand the pressing security threats faced by his country.