The controversial move announced by Public Security Minister Gilad Erdan means that up to 600,000 Israelis could apply for gun licences, a dramatic increase on the current 140,000 civilians with permits.
Israel's public security ministry estimates that among the hundreds of thousands of people who meet the new standard to apply for firearms, around 35,000 to 40,000 people will actually apply, boosting the number of permit holders to about 200,000 according to Haaretz.
"Skilled civilians carrying a gun in public contribute to a sense of security, act as an important line of defense against lone-wolf terror attacks and ...thus increase public security," Erdan said on Monday.
He claims the new policy "strikes a balance between the need to defend the public which might be at risk and the need to protect the public from incorrect use of a firearm".
The new regulation was slammed by Israeli Knesset member Haneen Zoabi, saying it is an effort to intimidate Palestinians.
Zoabi, who is a Palestinian citizen of Israel said Israel "wants to control Arab citizens, and impose fear on Arab streets".
Palestinians in the occupied West Bank are at even more of a risk of the new regulations.
Israel has occupied the West Bank illegally since 1967, committing various crimes against Palestinian civilians.
More than 600,000 Israeli Jews live in settlements in the occupied West Bank and East Jerusalem, in constructions considered illegal under international law.
Along with stealing land, occupying Israeli forces and settlers routinely torment Palestinians. Giving Israeli settlers potentially more power to impose violence on Palestinians could put them at even more risk of settlement violence.
Last month, Israel handed over the corpse of a Palestinain killed by an Israeli settler in occupied Nablus after holding it for three months.
Mohammed Abdulkarim Marshoud a 30-year-old father of four died after a settler shot him in the head in April at the illegal settlement of Ma'ale Adumim.
The settler who killed him alleged that he was about to be attacked by Marshoud with a screwdriver. Initially the Israeli army said he was about to attack the settler with a knife, but later retracted the statement.
After his death, Marshoud's family told °®Âþµº that they were not informed when Israel would hand over his corpse for burial.
The Israeli police held the corpse for more than three months before returning it to the family for a burial at his hometown in Balata refugee camp in Nablus.