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A prominent Arab Israeli lawmaker was also wounded in the confrontation in Umm Al Hiran village in southern Israel, where activists have long sought to draw attention to what they call the unjust practice of demolishing Arab homes.
Police said the man killed, a local resident, was active in the Israeli Islamic Movement and may have been influenced by Daesh - a claim residents strongly denied, calling him a respected teacher.
Local residents accused the Israeli police of using excessive force against demonstrators.
Israeli police spokesman Micky Rosenfeld claimed a local man sped toward the forces deployed to the Umm Al Hiran village early on Wednesday as they were securing the area ahead of its planned demolition. He alleged a jeep raced toward the troops, killing 34-year-old policeman Erez Levi. Troops opened fire at the driver, killing Yaakub Abu Al Qiyan, 50. The clashes continued, and several policemen were wounded.
Local residents said Abu Al Qiyan was trying to leave town and only lost control of his vehicle after police shot at him. Abu Al Qiyan's brother, Ahmad, said he was murdered in cold blood, and Amnesty International called for a probe into the reports of excessive force by police.
"The police are light on the trigger when it comes to Arab citizens," the Arab advocacy group Adalah said in a statement in which it accused the police of a culture of lying.
Lawmaker Ayman Odeh, head of the Arab Joint List in the Israeli parliament, was wounded in Wednesday's clashes, along with several others. Odeh was evacuated to a hospital with blood streaming down his forehead.
In a shaky voice, he told Israel's Army Radio that he was shot by overzealous officers who were deployed after extensive negotiations to delay the demolition broke down.
"This is a direct order from (Prime Minister Benjamin) Netanyahu, who wants to enflame the area," he said. "This is a disgrace."
Public security minister Gilad Erdan accused Odeh of stirring up the conflict and lying about what happened. He said he hoped the incident would not spark further divisions between Jews and Arabs in Israel, but that if it happens lawmakers like Odeh bore responsibility.
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