A leading civil-rights group has accused Israeli police of systematic discrimination against the Arab residents of East Jerusalem as growing numbers of hardline religious Jews take up residence in Palestinian areas.

A report from the Association for Civil Rights in Israel (Acri) found that violent confrontations between Jewish residents and their Palestinian neighbours had risen rapidly, but that Israeli police have largely ignored Palestinian complaints.

Israeli authorities "practise selective law enforcement and fail to provide even the most minimal protection to Palestinian locals," Acri claimed. "Law-enforcement authorities have become complicit in violating Palestinian rights; in many cases, they do not enforce the law or do so only in a discriminatory manner." Palestinians claim that they are often arrested as suspects when they make complaints against Israelis, that their children are arrested in circumstances that flout Israeli law on the treatment of minors, and that widespread surveillance cameras violate their privacy.

The Israeli police rejected the allegations. A spokesman claimed that many of the incidents contained in the report were blown "out of proportion." Most disturbances, he said, are initiated by Palestinians throwing stones at Jewish residents.

Large numbers of religious Jews, ideologically committed to an undivided Jerusalem, have moved into Arab-dominated East Jerusalem in recent months, provoking clashes with local residents. Palestinians fear that Israel is seeking to prevent East Jerusalem – illegally annexed by Israel after the Six-Day War in 1967 – from becoming the capital of a future Palestinian state. Stoking the tensions, according to Acri, are the armed private security contractors employed to protect the Jewish residents in East Jerusalem.

Ahmad Qarae'en, a Palestinian resident of Silwan, described how he was shot in the thigh during an argument with an off duty soldier visiting Jewish settlers. Mr Qarae'en was questioned as a suspect and the man who shot him was released after 24 hours without charge.

In a second case, Jamalat Mughrabi, who was evicted from her home by Jewish settlers, claims she was punched repeatedly by a Jewish man. When she arrived at the police station, she found that she was the suspect, and was taken into custody. At a hearing the following day, investigators allegedly refused to show video footage proving her innocence, and she was charged and fined.

Ronit Sela, a spokesman for Acri, said it had yet to receive an official police response. She said: "We're just calling on the police to do their job." Meanwhile, the Israeli Prime Minister Benjamin Netanyahu said yesterday a new and creative approach was required to reach a peace deal.

"We will have to learn the lessons of 17 years of experience from negotiations and to think creatively," he said Mr Netanyahu. "We'll have to think of new solutions to old problems."