Israeli Deputy Prime Minister Avigdor Lieberman has said Israel should separate Jews and Arabs so that Israel can be a homogenous Jewish country.
Mr Lieberman said Israel's Arab towns should be given to a future Palestinian state, while Israel should incorporate Jewish settlements in the West Bank.
He said ethnically divided Cyprus was "the best model" to follow.
Israeli Prime Minister Ehud Olmert said Mr Lieberman's views did not represent those of the government.
Israeli Arab politicians condemned Mr Lieberman's remarks as racist.
'Best solution'
"Minorities are the biggest problem in the world," Mr Lieberman said in an interview with Britain's Sunday Telegraph newspaper.
"I think separation between two nations is the best solution. Cyprus is the best model. Before 1974, the Greeks and Turks lived together and there were frictions and bloodshed and terror.
"After 1974, they constituted all Turks on one part of the island, all Greeks on the other part of the island and there is stability and security."
Mr Lieberman is a member of Israel's ultra-nationalist Yisrael Beitenu party that was brought into the governing coalition last week.
Arabs make up about 20% of Israel's population.
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