An Israeli draft law that would criminalise the use of the word Nazi in most cases has sparked a debate on freedom of speech.

Seven decades after the formation of the state of Israel, memories of the extermination of millions of Jews during the second world war permeate virtually every aspect of life in Israel. Public figures and interest groups frequently invoke the genocide to score political points, and the word and Nazi symbols have slipped into Israeli discourse over the years.

The bill would impose a fine of 100,000 shekels (more than £21,000) and six months in jail for anybody using the word or symbols from Adolf Hitler's Third Reich in a "wrong or inappropriate way". Educational settings would be exempt, as would certain artistic performances, said Shimon Ohayon, the bill's sponsor.

The Knesset gave preliminary approval to the measure on Wednesday, but it has to pass three more readings and committee discussions before becoming law. A similar effort in 2012 failed at the committee stage.

Ohayon, from the hardline Yisrael Beitenu party, said the law would put Israel on a par with other nations battling antisemitism. He acknowledged enforcement would largely rely on violations being reported to police.

"We want to prevent disrespect of the Holocaust," said Ohayon. "We allow too many freedoms, which are taking over in a way that is harming us."

Opponents say the measure endangers freedom of speech in a country that frequently asserts a claim to being the only democracy in the Middle East.

"Week after week you want to shut mouths and harm freedom of expression," said Zehava Galon, leader of the opposition Meretz party.

Six million Jews were murdered in the systematic Nazi effort to kill all the Jews of Europe. Created in 1948 in the shadow of the war, Israel provided a haven for hundreds of thousands of refugees liberated from Nazi death camps. Today, it is home to about 200,000 survivors.