Israel is to grant citizenship to several hundred Darfur refugees who are already in the country.
Hundreds of refugees have crossed from Egypt to Israel recently
Interior Minister Meir Sheetrit said he would work with the United Nations to set a quota of refugees to become naturalised Israelis.
Israel has been trying to curb the number of Africans entering the country illegally via Egypt in recent months.
But this has caused unease among some Israelis who feel the state has a duty to take in people fleeing persecution.
Mr Sheetrit estimates there are around 300 refugees from Sudan's Darfur region inside Israel. Other government officials say the number is closer to 500.
The UN estimates that at least 200,000 people have been killed and more than two million people have been uprooted from their homes since fighting began in the Darfur region of Sudan in 2003.
Mr Sheetrit said that Israel - founded after the Nazi atrocities against the Jews in WWII - could not ignore the issue.
"Israel, with its history, must offer assistance," said Mr Sheetrit. "It can't stand by and shut its eyes. But a quota must be set".
He did not say what would happen to any Darfur refugees who were not granted citizenship.
Israel estimates that 2,800 people, most of them Africans, have reached the country illegally through its border with Egypt over the past few years.
In July, the Israeli Prime Minister Ehud Olmert announced that any refugee caught crossing into the country from Egypt would be returned through an official crossing.