One evening last week a group of people set out to walk along a disused railway in Jerusalem, now a pleasant path through the south of the city. They were mostly families, some with their dogs, some pushing strollers. Among them was David Broza, one of Israel's best-loved musicians.

They carried no banners and chanted no slogans, but the message of their small demonstration – their fourth in recent weeks – was clear from their T-shirts. In black lettering on white cloth, the words in both Hebrew and Arabic read: "We march together, hand in hand." Most of the group of about 200 were connected to a school at the starting point of their walk. The Hand in Hand school is unique in Jerusalem for being a mixed bilingual establishment of Jewish and Palestinian children and staff, with a strong ethos of coexistence and peace. It is one of just five such schools in Israel; all others are segregated.

Maya Frankforter, a Jewish parent, said the school community had decided to march to protest at the violence that erupted in Jerusalem following the murders of three Jewish youths and a Palestinian teenager last month and the ensuing horror in Gaza. She said the demonstrations were "like an island of strength, because I've been feeling suffocated, hopeless and helpless. This empowers me."

Palestinian teacher Widad Naoum said she, too, drew comfort from the protests. "People see me as the enemy. Every day, they point the finger at me. They judge me because I am Arab, no matter what I think or do."

The demonstrators soon encountered opposition from a handful of youths, who shouted "traitors" and "go back to Gaza". On previous marches, women protesters have had the words "bitch" and "whore" screamed in their faces. The parents do their best to shield the children from the abuse.

The picture has been repeated in many cities in Israel in recent weeks. Protests against the bloodshed in Gaza have attracted much smaller numbers than in previous conflicts, in a reflection of the diminishing weight of the "peace camp" in Israeli society.

Last weekend protesters in the northern city of Haifa were assaulted by rightwing activists, who beat up the Arab deputy mayor and his son. Police have been forced to protect a series of peace marches in Tel Aviv, including one last week that was pelted with eggs and plastic bottles. A public reading of ex-soldiers' testimonies about their role in previous conflicts in Gaza, organised by Breaking the Silence, a group of veteran combatants dedicated to exposing military injustices, was barracked by up to 100 extremists.

It is a big contrast with the 400,000 people – then almost a tenth of the country's population – who took to the streets in 1986 to protest about Israel's war in Lebanon. In 1995, 100,000 people attended the rally in support of the Oslo accords at which prime minister Yitzhak Rabin was assassinated. And in 2009 several thousand people joined peace marches during Operation Cast Lead, Israel's three-week assault on Gaza.

Since the start of the current conflict, protests have generally attracted a few hundred, with last Saturday's march in Tel Aviv mustering around 1,000. After another week of carnage, activists were hoping for a bigger demonstration in the city on Saturday night.

The reasons for the decline of Israel's peace movement are, inevitably, complex and interrelated. They include the failures of the Oslo accords and of successive attempts to forge a peace deal; the growing voice of the extreme right in Israeli politics; the "normalisation" of the 47-year-long occupation; and the relative marginalisation of the Palestinian cause both in Israel and internationally.

Added to that mix is weariness and hopelessness. "I think the peace movement became frustrated that nothing changes," said Maayan Dak of the Women's Coalition for Peace. "Things just repeat. People feel there is no point."

According to Tamar Hermann, author of The Israeli Peace Movement: A Shattered Dream, the decline of the Israeli peace camp began in the aftermath of the 1993 Oslo accords.

"Most people felt the government was now taking care of the matter: they could do other things," she said. "And when they realised Oslo wasn't working, they still didn't want to protest for fear they would inadvertently be joining forces with the [anti-Oslo] rightwing."

Other factors she identifies as contributing to the peace camp's contraction include the second intifada, or Palestinian uprising – "when buses are exploding in the street, it's hard to call for peace" – and the shifts in Israeli politics over recent years. People on the left or centre moved to the centre or the right, and people on the far left became more radicalised, supporting a binational state or the boycott movement, she said. "They lost contact with the mainstream."

Uprisings elsewhere in the Middle East, and the increasing focus on the Iranian nuclear threat, pushed the Palestinian cause to the margins.

"The Palestinians were not perceived as a strategic threat to Israel's national security," said Hermann. "People started to believe that they could go on living this for many years. The peace camp was looked on as anachronistic."

Others cite the new threat they feel from rockets threatening major population centres, and from militants using tunnels to infiltrate Israeli communities, possibly to grab hostages and smuggle them back into Gaza.

Meanwhile, the Israeli right has become ever more strident. A political culture of antagonism towards and antagonism towards Israeli-Arabs, who make up 20% of the population has fuelled extremism, according to activists on the left. "Politicians have given legitimacy to extremism. Rightwing violence does not come out of nowhere," said Dak.

One activist, who asked not to be named, said: "It's never been like this before, we've never seen this atmosphere of fear and attacks on protests."

Frankforter echoed his view: "The atmosphere in Jerusalem, and Israel as a whole, is very scary. I never felt fear before. I felt frustrated and isolated in previous wars, but never physical fear. People are frightened to speak out. Something is broken in Israel."

Some say the lack of a broader context to the current violence in Gaza is part of the problem in winning support for the peace movement. "Lots of people are appalled at the killing of children and the level of destruction. But they don't connect that to the occupation: they don't see it as part of a bigger pattern," said the activist.

Peace, said Yehuda Shaul of Breaking The Silence, "is a word that has lost its meaning. [Israeli prime minister Binyamin] Netanyahu, [hard right politician Naftali] Bennett, [Palestinian president Mahmoud] Abbas, even Hamas – they all say they want peace. The real question is: are you willing to end the occupation? Most Israelis don't understand the context of the occupation, that's why people are so silent."

If current efforts to forge a ceasefire deal fail, and the violence in Gaza worsens, protests may grow. Back at the Hand in Hand school, Jewish and Palestinian parents and staff are meeting regularly, despite being in the midst of the long summer vacation, to seek ways to hold their community together and spread a message of peace. "We're together, and that's the way it should be," said Frankforter. "The most important thing is we try to build a life together. But it's getting harder."