In the strange world of Israeli academia, an Arab college lecturer is being dismissed from his job because he refused to declare his "respect for the uniform of the Israeli army." The bizarre demand was made of Nizar Hassan, director of several award-winning films, after he criticized a Jewish student who arrived in his film studies class at Sapir College in the Negev for wearing his uniform and carrying a gun.

The incident raises disturbing questions about the freedom of Israeli academics, sheds light on the veneration of the military in Israeli public life, and exposes the close, verging on incestuous, ties between the army and Israeli academia.

Meanwhile, for many of Israel’s 1.2 million Palestinian citizens, who are nearly a fifth of the country’s population, Hassan’s treatment confirms their fears that decades of discrimination, especially in higher education, are far from over.

Hassan has faced a storm of criticism, including claims that he is anti-Semitic, since the Israeli media mistakenly reported back in November that he had thrown out of class one of his students, Eyal Cohen, over the way he was dressed. Hassan and most of the students present say Cohen was simply warned not to attend class in future wearing his uniform.

The story soon gained a life of its own, becoming the subject of incensed talk shows and newspaper columns. A group of rightwing college staff and students lobbied for Hassan, the only Arab lecturer in the film school, to be dismissed, and the Knesset’s Education Committee denounced him.

Critics claim, apparently without irony, that Hassan humiliated the student, abused the concept of academic freedom and impugned the reputation of the Israeli army.

Condemnation has come from surprising quarters, including the journalist Gideon Levy, better known for his articles attacking the the army’s treatment of the Palestinians under occupation.

But more predictable has been outrage from the right. Last month two leaders of extremist Jewish settlers in Hebron, Baruch Marzel and Itimar Ben Gvir, announced that they had enrolled in Hassan’s course. "I would love for him to ask me about my army service," said Marzel. "I can only assure you that he will be the one walking out of the classroom."

The army added its voice too, with senior officers, including the Chief of Staff, Gabi Ashkenazi, putting pressure on Sapir College to publicly rebuke the filmmaker and punish him.

A letter from the head of army personnel, General Elazar Stern, accused the college of failing to act with "proper determination" and urged that Hassan face "sharp, public, official condemnation." Stern added that Hassan must be made to apologize or be sacked, otherwise the army would end its funding of places for hundreds of soldiers who attend courses at Sapir.

Most academic institutions in Israel not only depend on such funding but receive special grants and endowments for research in security-related subjects. The Israeli revisionist historian Ilan Pappe, who was forced out of Haifa University last year, estimates that half of lecturers in Israeli universities have ties to the security services.

In Sapir College’s case, links to the army have been reinforced by its location in Sderot, a poor development town close to Gaza that is the target of most of the Qassam rockets fired into Israel.

Under growing pressure, the college’s Academic Council suspended Hassan without offering him a hearing. It also appointed for the first time in the college’s history an academic committee to investigate the incident and report on what disciplinary action should be taken.

The committee published its report late last month, conceding that he is an "outstanding teacher" but offering only a cursory examination the events at the center of the controversy. Instead the members harshly criticized Hassan’s behavior and personality and recommended that he apologize to Cohen or face dismissal.

The college’s president, Zeev Tzahor, intervened by contributing his own condition. He wrote to Hassan telling him that in his apology "you must refer to your obligation to be respectful to the IDF uniform and the full right of every student to enter your classroom in uniform."

Hassan refused and, according to reports last week, the college has begun proceedings to dismiss him.

"The whole reaction has been hysterical," Hassan, who lives in Nazareth, said. "It really surprised me, as did the lies that were told about what had happened."

His students say the issue has been blown out proportion and that Hassan has never hidden his opposition to militarism, wherever it exists.

Enass Masri, one of two Arab students in Hassan’s film class, said: "When he saw Cohen wearing his uniform, he explained that all military uniforms  of the Israeli army, of Fatah or of Hamas  are symbols of violence and that he does not allow them into his classroom.

"His concerns about the blurring in Israeli society of the boundaries between the civil and military are well known."

She added that the mistaken reports about Cohen being thrown out of class may have been part of a long-standing campaign to oust Hassan from his job. He had made himself unpopular with some staff and students by speaking his mind, she said. "Some people at the college are not prepared to accept the kind of things he says from an Arab."

Sapir College calls itself "a lighthouse in the Negev," and its film school once had a reputation for encouraging dissenting social and political opinions.

In other Israeli colleges, discussion of "politics"  a euphemism for views not officially sanctioned  is rarely allowed.

For example, at Haifa University, which has the largest Arab student body in the country, all protests on campus are banned unless licensed by the vice-chancellor. Unofficial demonstrations, however peaceful, are broken up and usually filmed by security staff. Video evidence is used as grounds for suspending or expelling students.

Sapir’s president, Tzahor, recently told the Haaretz newspaper that his motto is: "Politics  only as far as the classroom door."

However, the college’s definition of "politics" appears selective. In another recent incident at Sapir, lecturer Shlomit Tamari told a Bedouin student to remove her head-covering, telling her it was a sign of her oppression. No disciplinary action was taken against Tamari, who is unrepentant: "I told the college that I have academic freedom, and I can talk about that subject and I am continuing to do so."

Enass Masri said she was also shocked that the college committee did not question the students in Hassan’s class about what took place. "We thought we would be able to put the record straight, but we were never invited to testify.

"Almost all of the students are on Hassan’s side, and we wrote a letter to the college authorities in protest at his treatment."

Instead, she says, the committee interpreted the "meaning" of what happened, according to their own view of Hassan. "They looked at him not as a human being but as an Arab, and Arabs are not allowed to have an opinion on Israeli militarism."

Hassan takes a slightly different view. Describing his questioning by the committee, he said: "They wanted me to be the Palestinian in the room, and I refused to oblige. They wanted to believe that I object to the army uniform because I am Palestinian. But I reject the uniform because it is opposed to my universal and human values. I acted as I did because I am a teacher and a human being.

"What shocked me was that the committee refused to believe that could be my motivation."

Certainly the committee’s report dismisses Hassan’s arguments, claiming: "Nizar abused his status and his authority as a teacher to flaunt his opinions, feelings and frustrations as a member of the Arab national minority in Israel, cloaking himself in a ‘humane’ and ‘universal’ garb, whereas in fact he demonstrated a stance of brute force bearing a distinctly nationalist character."

Haim Bresheeth, an Israeli filmmaker who was dean of Sapir’s film school between 1996 and 2002, until he was hounded out over his anti-Zionist views, wrote to Tzahor, the college president, arguing that he was making an "irrational and immoral demand" in expecting Hassan to respect the army’s uniform.

Bresheeth, referring to the reserve duty that most Israeli Jewish men perform well into their forties, added: "You are a soldier first, and only then an academic I call on the historian Zeev Tzahor to refuse the orders of Major Zeev Tzahor."

As in most other areas of Israeli life, the country’s Palestinian minority faces systematic discrimination in higher education. No public university is located in an Arab community or teaches in Arabic, and, though the minority is a fifth of the population, fewer than 1 per cent of lecturers are Arab.

In addition, the number of Arab students is one-third of their proportion in the population  an under-representation that is apparently intentional. In 2003, psychometric tests biased towards Western culture were scrapped in an effort to help "weaker sections" of society gain acceptance to university. However, when the Committee of University Heads learnt that the number of Arabs entering university had risen sharply as a result, the tests were immediately reinstated.

Several leading Israeli academics are outspoken racists, including David Bukay and Arnon Sofer at Haifa University and Raphael Israeli at Hebrew University in Jerusalem. The latter was called as an "expert" witness by the state at a trial in 2004 in which he stated that the Arab mentality was composed of "a sense of victimization," "pathological anti-Semitism," and "a tendency to live in a world of illusions."