The decision to prosecute 12 Israeli Arabs over what the local media have described as the “lynching” of an Israeli soldier on a bus shortly after he shot dead four passengers has been greeted with outrage from the country’s Arab minority.

The inhabitants of Shefa’amr, one of the largest Arab towns in the Galilee region and the location of the attack, are expected to stage a one-day strike today in protest against the indictments. Seven of the 12 face charges of attempted murder.

Jafar Farah, the head of Mossawa, an Arab political lobbying group, said the indictments, which follow a series of about-turns by state prosecutors, reflected “the current harsher political climate” for the Arab minority, one-fifth of the country’s population.

A Right-wing government, established this year, includes the party of Avigdor Lieberman, which is openly hostile to Arabs.

Anger at the indictments has been compounded by a decision taken by the prosecution service a few days earlier to formally close an investigation into possible assistance the soldier, Eden Natan Zada, received from Jewish extremist groups.

Nakad Nakad, a member of a Shefa’amr public committee set up after Zada’s attack, said that the prosecution had “decided in this case that the victim is the guilty party”. Zada, who was 19, carried out his attack in Aug 2005 in what was widely seen as an attempt to foil the government’s withdrawal of settlers from Gaza, which was due to take place days later. Zada was a member of Tapuah, an extremist religious settlement in the West Bank.

He took a bus into Shefa’amr with his army-issued M-16 rifle and a backpack stuffed with ammunition. According to witnesses, when the bus stopped, he shot the driver and sprayed the rest of the bus with bullets, killing three passengers and wounding 22.

Zada was overpowered after a female passenger grabbed the gun while he was trying to reload.

Police arrived a short time later and handcuffed Zada as residents surrounded the bus. According to police testimony, a tense stand-off developed before a group stormed the bus and beat Zada to death.

The incident was politically charged from its first moments.

Zada’s two dozen victims, all Arabs, as well as their families, were denied state compensation after a ministerial panel ruled that a serving soldier could not be regarded as a terrorist.

Israel’s Arab minority were further angered by police inquiries that concentrated almost exclusively on the circumstances of Zada’s death.

Maher Talhami, a lawyer for three of the suspects in Shefa’amr, said police had recommended that parallel investigations into Zada’s connections to Kach, a group officially banned but openly espoused by extremist settlers, be closed after only four months.

Kach demands the violent expulsion of all Arabs from both Israel and the occupied territories.

Another lawyer, familiar with the case who wished not to be identified, said: “Politics is playing a much larger part in the indictments than legal issues.” She said the conduct of the prosecution in the case had been highly unusual and inconsistent.

It took 10 months to charge the first suspects, who were placed under house arrest. A year later, after seeing secret police evidence, a judge ruled that the suspects were unlikely ever to be indicted and lifted the restrictions on them.

Their bail money was returned in April 2008, under protest from the police. Two months later, the prosecution did a U-turn and announced that all 12 would be charged with violent assault.

On Sunday more severe charges of attempted murder were imposed on seven of them, with the rest accused of assaulting police officers. A conviction for attempted murder carries a maximum 20-year jail term.

Mr Talhami said that although he did not condone people taking the law into their hands, it was important to note that official Israeli policy was to show no mercy to those committing terrorist attacks.

“Arab and Jewish citizens watch the same Israeli TV and we see the state regularly honouring Jewish civilians and police for killing terrorists without compunction, even when they are ‘confirming the kill’ of someone who is already injured and posing no threat.”

He referred specifically to the case of an injured Palestinian who was shot dead by an Israeli policeman in Dimona in February last year as he lay bleeding on the ground after a suicide attack went wrong. “There was not even an investigation in that case, let alone an outcry,” he said.

Arab legislators in the Knesset from all parties denounced the indictments. Jamal Zahalka of the Tajamu party said: “We demanded, and we are continuing to demand, an objective commission of inquiry to reveal who was behind Zada, who helped him and who authorised his pogrom in Shefa’amr.”