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Prime Minister cabinet decided to impose further restrictions in an attempt to halt the spread of Covid-19 on Thursday, Reuters reported.

The prime minister warned that the recent surge in infections, not deterred by last week's lockdown, was pushing Israel to "the edge of the abyss". 

"In the past two days, we heard from the experts that if we don't take immediate and difficult steps, we will reach the edge of the abyss," Netanyahu said in the cabinet meeting.

"We reached a decision to pull the handbrake," Deputy Health Minister Yoav Kisch told Israel Radio about the cabinet decision.

It and other Israeli news site detailed the new restrictions, which include allowing only business in "essential" sectors such as finance, energy, health, technology, agriculture and food sales to operate.

The tightened restrictions, which will come into effect on Friday given parliamentary approval, will uphold a rule ordering residents to stay within one kilometre of their home.

There are numerous exceptions to the distance rule, including people going out to buy medicine or food, as well as to attend a funeral or circumcision ceremony.

But Israeli media reported that the one kilometre rule will now apply to attending street protests, Reuters reported.

Netanyahu has faced weeks of public protests against his leadership and on Thursday hundreds of Israelis rallied in Tel Aviv against the second lockdown.

The new restrictions on protest will likely affect the demonstrations outside Netanyahu's Jerusalem residence, where protestors are demanding he resign over corruption allegations.

Israel has the world's highest coronavirus infection rate as a proportion of its population, according to an AFP tally of the past fortnight, and on Wednesday the health ministry announced nearly 7,000 positive cases over 24 hours.

The country has recorded more than 200,000 cases since the pandemic hit, with 1,317 deaths.

While Israel was praised for its initial handling of the pandemic, faith in Prime Minister Netanyahu's ability to handle the health crisis has plummeted. 

Just 27 percent of Israelis trust their premier to manage coronavirus, down from 56 percent in late March, according to a survey published Wednesday by the Israel Democracy Institute.

Netanyahu's government had tried various measures in recent months to avoid a full shutdown, such as weekend closures, but has repeatedly backtracked in the face of opposition.

Earlier this month, the coalition attempted to imposed localised lockdowns in places with high infection rates, only to downgrade the measure to curfews and school closures.