Israel has outlawed a chapter of the Islamic Movement and declared membership in the group to be a crime, accusing the group of inciting lies, instigating paid provocation at the holy site and fuelling the recent wave of Palestinian attacks against its people.

Defence Minister Moshe Yaalon signed the decree issued under State of Emergency regulations, a British Mandate-era legislation which Israel inherited in 1948 and has kept in place with annual renewal since, according to the Los Angeles Times.

Israel's security Cabinet reportedly banned the movement's northern chapter headed by firebrand cleric Sheik Raed Salah for its years-long "mendacious campaign of incitement that included falsely accusing Israel of a plot against Jerusalem's Al Aqsa mosque, instigating paid provocation at the holy site and fuelling the recent wave of attacks on Israelis.''

The new order was meant to ensure the country's security amid growing terror threats by extremist organisations, some from the Arab League, the Israeli Cabinet said in a statement issued on Tuesday.

Critics, however, blasted Israel's ban on the cleric's group, describing it as an act of political persecution among Arab members fighting to defend the Al Aqsa mosque.

"[It is] an explicitly politically motivated step,'' said Ahmad Tibi, an Arab Israeli lawmaker. "The move is a cynical exploitation of the abhorrent crime in France."

He accused [President Benjamin] Netanyahu's government of "looking for a scapegoat for the situation for which it was itself responsible.''

"The timing is hardly coincidental," noted another lawmaker Taleb Abu Arar in a media interview, apparently putting the blame on Israel on the Paris attacks. "Outlawing an integral part of Arab society is an infringement of the minority's rights."

Some members of intelligence circles also expressed concern during discussions that the move would cause fierce antagonism among Arab Israelis and wind up being counterproductive, said the LA Times.

Adalah, a rights advocacy group for Arab Israelis, called the ban of the Islamic Movement chapter "an aggressive, draconian measure" to suppress a legal political movement.

Accusations that Israeli officials are limiting access to the mosque or intend to do so have fuelled weeks of knifings and other attacks by Palestinians against Israeli citizens.

Before Tuesday's announcement, Israeli security forces reportedly raided the offices of 17 institutes and foundations associated with the group, shut them down and confiscated computers, documents and money. Authorities also froze bank accounts suspected to have been used to finance activities against state security, Israeli media reported.

Seized documents from the movement's property showed the group received considerable donations that originated in foreign countries such as Turkey and Qatar, police said

Netanyahu accused the group of undermining the state, maintaining close ties with the militant movement Hamas and seeking to replace Israel with an Islamic caliphate, like other militant extremists.