Last Thursday, in the early hours of the morning, a Palestinian community leader's home was raided by Israeli security forces. In front of his family, the wanted man was hauled off to detention without access to a lawyer, while his home and offices were ransacked and property confiscated.

While this sounds like an all-too typical occurrence in West Bank villages such as Bil'in and Beit Omar, in fact, the target in question this time was Ameer Makhoul, a Palestinian citizen of Israel and head of internationally renowned NGO network Ittijah.

After being snatched last week, Makhoul's detention was subject to a court-enforced gagging order, preventing the Israeli media from even reporting that it had happened. This ban was finally lifted yesterday, as Israeli newspapers were being forced to report on angry protests by Palestinians in Israel without explaining the specific provocation.

It turned out that another Palestinian citizen of Israel, Balad party activist Omar Said, had also been arrested, and interrogated by the Shin Bet since the end of April. Now, both Makhoul and Said are to be charged with espionage and "contact with a foreign agent" – namely, Hezbollah. On Monday night, hundreds of demonstrators rallied in Haifa to protest against what they call "an escalating campaign to crack down on Israel's Palestinian citizens".

The gagging order recalls the Anat Kam case, where for several months it was forbidden to report that the former soldier was under house arrest and being investigated by the Shin Bet for "leaking classified military information". The facts about Kam were first circulated by bloggers and campaigners, something repeated in Makhoul's case (including this Facebook group).

The night raids, interrogations, and charges are not isolated incidents – indeed, Makhoul had been prevented from leaving the country in April, according to an order (PDF) by the interior minister. Days later, a West Bank Palestinian non-violent resistance organiser, Iyad Burnat, was also banned from travelling at the Jordan crossing, en route to, among other things, a conference on the Geneva conventions.

Several examples now point to an uncomfortable reality for the self-proclaimed "only democracy in the Middle East": practices that have long been routine in the military occupation of the West Bank and Gaza are being used in Israel to suppress dissent and limit civil liberties. The green line is increasingly blurry.

There are the Sheikh Jarrah protests, where marches and rallies against the eviction of Palestinians from their homes have been targeted by the police, including the arrest of an organiser at his home – only for him to be released without charge and no evidence presented. Then there is the trend towards repressive legislation, with the so-called nakba law making its way through the Knesset, the Israeli parliament, that will ban state funding for any group that marks the expulsions of Palestinians in 1948.

Two weeks ago, a new bill was proposed by more than a dozen cross-party members of Knesset (MK), which would outlaw any organisation "if there is a reasonable basis to conclude that the organisation is providing information to foreign bodies or is involved in lawsuits abroad against senior officials in the government in Israel and/or officers in the Israeli army regarding war crimes". Adalah, one of the groups specifically targeted, stated: "Only a state that commits prohibited acts would be interested in such legislation."

Arab members of the Knesset are also increasingly under attack. MKs Mohammad Barakeh and Said Naffaa have had their parliamentary immunity stripped so that they can face criminal proceedings, with the chair of the committee which deals with immunity issues reported to have suggested that "a serious decision" would have to be made as to "whether or not these parties can continue to sit in the Israeli parliament, even while they operate against the country".

More recently, a trip by Arab MKs to Libya has been greeted by attempts to "strip the members of their immunity", with MK Michael Ben-Ari declaring "an historic opportunity to abolish once and for all the immunity and rights of Knesset members who hate Israel and denigrate the state".

At the heart of this and other cases against Palestinian citizens is contact with the wider Arab world. According to Adalah, the "charge of meeting a foreign agent" is so broad that it criminalises "almost any Arab who establishes legitimate relations with political and social activists in the Arab world".

So why is this happening now? First, it is the latest manifestation of a deteriorating atmosphere in Israel, with political dissent and human rights groups under attack. Depressingly, there is considerable support among Jewish Israelis for this kind of crackdown: one poll found that 57.6% of respondents "agreed that human rights organisations that expose immoral conduct by Israel should not be allowed to operate freely".

Second, there is also a specific focus on Israel's Palestinian minority. Three years ago, it was revealed that the Shin Bet intended to "thwart the activity of any group or individual seeking to harm the Jewish and democratic character of the state of Israel, even if such activity is sanctioned by the law". This is no doubt in part a response to the kind of developments Makhoul talked about in January when I met him in Haifa: how "this generation" of Palestinian citizens "has grown up with October 2000. The green line disappeared – in terms of thinking, behaviour, and consciousness."

Hussein Abu Hussein, the lawyer for both Makhoul and Said, stressed the role of someone like Makhoul in being a prominent advocate internationally for "the need for accountability" – in other words, "the state has enough reasons to stop this voice". Mohammad Zeidan, of the Arab Association for Human Rights (HRA), says that the arrests are "clearly political". He believes that for some in Israel, the work being done by NGOs and Arab parties on the international level is "crossing a red line" – "they want to remind us that this is not a democracy".