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Israel's defence minister called Palestinian-Israeli lawmakers "war criminals" a day after he urged a boycott of Palestinian citizens of Israel living near the scene of clashes over the US president's Jerusalem declaration.

Avigdor Lieberman was speaking in a televised parliamentary debate on a motion of no confidence in the right-wing government filed by the mainly Palestinian Arab Joint List alliance on Monday.

Presenting the motion, Joint List lawmaker Hanin Zoabi said Prime Minister Binyamin Netanyahu "should be tried at the International Criminal Court in The Hague, because he is a war criminal."

"Occupation is always belligerent, violent, illegitimate and a basis for war crimes," she added, referring to Israel's 50-year occupation of the Palestinian territories.

"All the Joint List are war criminals, every one of you," Lieberman responded.

The alliance has 12 Palestinian Arab members and one Jew.

"You exploit the weaknesses and advantages of a democratic state to destroy us from within, we have no illusions," he told them.

"You are here by mistake and the time will come when you will not be here."

Palestinians citizens of Israel, known as '1948 Palestinians' in the Arab world, are descendants of Palestinians who remained on their land following the creation of Israel in 1948, and account for some 17.5 percent of the current population.

Lieberman has long advocated land-swaps in a future peace deal that would see some Palestinian Arab areas of Israel proper handed over to a future Palestinian state in exchange for Israeli retention of some West Bank Jewish settlements.

He has also proposed conditioning the Palestinian Arabs' continued Israeli citizenship on them taking oaths of 'loyalty' to the Jewish state.

On Saturday night, dozens of Palestinian-Israelis blocked the Wadi Ara intersection in northern Israel, police said, throwing stones at vehicles and burning tires in protest at Donald Trump's controversial declaration of Jerusalem as Israel's capital.

"Those who demonstrate in Israel holding Hizballah, Hamas and PLO flags are not part of the state of Israel" --Avigdor Lieberman.

The windows of a bus were smashed and its driver was slightly injured. Police arrested two minors and a man from Arara, an Arab town in the Wadi Ara area.

Speaking to Israeli army radio the next day, Lieberman proposed collective punitive sanctions.

"Those who demonstrate in Israel holding Hizballah, Hamas and PLO flags are not part of the state of Israel," Lieberman said.

"I therefore call on Israeli citizens to impose an economic boycott on Wadi Ara - don't shop there, don't eat in the restaurants and don't buy services from them."

Jewish Israelis must simply "give them the feeling they're not wanted here," he said.

Israel regards Jerusalem as its capital, a position nearly the entire world rejects saying its status should be determined in peace talks with the Palestinians.

Jerusalem is a key issue in the Israeli-Palestinian conflict, and many Arab leaders and others have reacted in anger.  

Trump's move has been condemned worldwide and protests have been taking place globally including in Pakistan, Afghanistan, Iran, Turkey, Malaysia, Indonesia, Egypt, Jordan.