The case has highlighted what Arab-Israelis say are widespread disparities in the rights that Israel affords to Jews and Arabs with Israeli citizenship.

Arabs excluded

Supporters of the JNF argue that the organisation has collected money to purchase lands for Jews and therefore should be allowed to provide their services to Jews alone.

"The good Jews who donated money 60, 50, 40 years ago, and even today didn't do so to sell land to Arabs," Robert Aumann, an Israeli-American Nobel laureate who supports the JNF, told Israel Radio on Monday.

The court case dates back to 2004, when Arab citizens were barred from bidding on an Israeli government tender for housing in Carmiel, northern Israel.

Arab Israelis were excluded for the tender on the grounds that the land in Carmiel belonged to the JNF and was intended only for Jewish use.

Menachem Mazuz, attorney general, ruled in favour of the Arab petitioners in 2005 when he said the JNF must allow non-Jews to buy the fund's land.

However, Mazuz also said that should a non-Jew purchase JNF land, the government’s Israeli Lands Authority could compensate the organisation with state-owned land.

The court petition from Arab Israelis and human rights organisations said the JNF and the ILA had not observed Mazuz's ruling.

Influential group

The JNF was founded in 1901 to buy plots in Palestine, which was then under the rule of the Ottoman empire.

The group owns about 13 per cent of Israel's land and calls itself "the caretaker of the land of Israel, on behalf of its owners - Jewish people everywhere."

To a large extent, land owned by the JNF defined the early borders of the Jewish state.

In 1953, five years after the state Israel was established, the JNF was re-organised as an Israeli company.