Prime Minister Benjamin Netanyahu on Sunday defended a law which has outraged Israel's Druze minority, saying it would help prevent Palestinians and illegal migrants from seeking Israeli citizenship.

"The Nation-State Law prevents, for example, the exploitation of the family reunification clause under which very, very many Palestinians have been absorbed into the country," he said at the start of the weekly cabinet meeting.

"It could be that this law will also be able to assist us in blocking the future entry of labour migrants," he said in Hebrew.

The law, which passed last month, is part of Israel's so-called basic laws, a de facto constitution.

It makes no mention of equality or democracy, implying that the country's Jewish character takes precedence, and speaks of Israel as the historic homeland of the Jews, who have a "unique" right to self-determination within its borders.

Arabs have strongly criticised the legislation, particularly those from Israel's 130,000-strong Druze community, who say it makes them second-class citizens even though, unlike other Arabs, they are subject to compulsory service in the military or police alongside Jewish Israelis.

"The state of Israel is the national state of the Jewish people. Israel is a Jewish and democratic state. Individual rights are anchored in many laws," Netanyahu said Sunday.

"Nobody has harmed -- and nobody intends to harm -- these individual rights but without the Nation-State Law it will be impossible to ensure for (future) generations the future of Israel as a Jewish national state."

Netanyahu spoke of the "deep bond" between the Jewish state and the Druze, and he announced the formation of a special ministerial committee to boost relations.

Tel Aviv tonight. Druze community protest against nation-state law. pic.twitter.com/zT1kRnCKon — Neri Zilber (@NeriZilber) August 4, 2018

Tens of thousands of Druze and their supporters rallied in central Tel Aviv on Saturday to protest against the legislation.

"Despite our unlimited loyalty to the state, the state doesn't consider us equals," Israeli Druze spiritual leader Sheikh Muafak Tarif said in a speech at the rally.