Occupied Jerusalem: Israel plans to build a new city for Arab citizens in the Galilee region, the first housing project of its kind since the creation of the Jewish state in 1948, local media reported on Monday.

The proposal for the city, whose location has still to be determined, was made by Interior Minister Meir Sheetrit and approved by the cabinet on Sunday.

"There is a need to broaden the range of opportunities available to the non-Jewish population," Sheetrit was quoted as saying.

"My aspiration is for a new Arab city in the Galilee, where young couples can buy a house, just like in any other city in the world."