The Israeli cabinet has decided to back an investment plan for Israeli Arabs.

A $214 million dollar package will be set aside for Israeli-Arab groups, who have been cautious about celebrating the news given their history of discrimination by the Israelis.

About 20% of Israel's population are people of Arab descent who remained in Israel after its creation in 1948.

Many of them have not been able to keep up with Israeli communities, because they receive lower levels of government spending.

The Israeli Arabs have much higher poverty levels than Jewish Israelis.

To tackle the wealth gap, the government's dramatic change will commit around $214 million over five years into the areas of economic infrastructure, housing and transportation in 12 localities.

The Israeli government has said the money will be backed up with an initiative to reduce violence within the communities.

It will also raise employment rates among Israeli Arabs, particularly among women.

The plan does not tackle education, which is an area where Israeli Arabs frequently say there is discrimination.

On announcing the fund, Prime Minister Benjamin Netanyahu said Israeli Arab potential had not been reached, and economic growth and equality for the group could only enhance and transform the face of Israeli society.