Israeli prosecutors have charged a leader of Israel's Islamic Movement and three other senior members with belonging to a terrorist organisation.
Hundreds of supporters demanded the men's release
Sheikh Raed Salah and the three other men were also charged with channelling funds to charities inside the Palestinian territories linked to the militant Islamic group Hamas.
Along with a fifth man - the mayor of the northern Arab town of Umm al-Fahm - they were indicted over alleged contacts with foreign intelligence agents.
"This is a blow at the entire [Israeli] Arab community. It is meant to silence the entire Arab community," Sheikh Raed shouted as he entered the courtroom in Haifa, the Associated Press said.
Outside, hundreds of supporters of the Islamic Movement - the largest political body among Israeli Arabs - demonstrated to demand the men's release.
Arab critics have dismissed the arrests as politically motivated.
The Islamic Movement is accused of raising millions of dollars abroad for Hamas charities in the West Bank and Gaza Strip.
The men were arrested during a massive police operation
It is not directly accused of funding Hamas attacks, but of helping to finance social programmes run by Hamas and supporting Palestinians - mostly Hamas members - jailed by Israel for "hostile activity against the state."
Officials within the Islamic Movement deny helping Palestinians involved in attacks against Israeli targets, but said they help the families of Palestinians who are killed or injured in clashes with the Israelis.
Hamas has denied any links with the Islamic Movement.
The arrests, which involved hundreds of police and agents of the Shin Bet security service, signalled a further worsening in relations between the authorities and the 1.2 million Arab minority who account for about one-fifth of the Israeli population.
Israeli Arabs have long complained of systematic discrimination by the authorities, and tensions have been running especially high since police killed 13 Arabs in anti-government riots in October 2000.