Despite on-pitch brawling between Beitar and Bnei Sakhnin players in the seventh minute of extra time, police reported only minor incidents off the field.
Police originally banned the game from being held in the Arab town of Sakhnin due to safety concerns after a series of deadly attacks in east Jerusalem and the occupied West Bank.
There is a history of racist violence by some Beitar supporters who have clashed with Sakhnin fans in the past.
But on Friday they rescinded the ban, saying that security had been "significantly" improved at Bnei's Doha Stadium, which was built with millions of dollars in donations from Qatar.
On Sunday night police deployed 700 officers in and around the stadium, including paramilitary border police and riot squads, police spokesman Micky Rosenfeld said in a statement.
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Another 200 private security guards patrolled the ground, where 5,000 spectators attended, he said.
Police had limited the number of tickets available to Beitar supporters and an AFP photographer at the scene said about 600 were admitted.
He said that while Beitar supporters waved Israeli flags, about a dozen Sakhnin fans waved the Palestinian flag and others lit flares.
No violence was reported, but police said they confiscated 50 Palestinian flags Sakhnin supporters tried to take into the ground "contrary to terms of the licence" for the event.
A Beitar fan was forced to remove a shirt supporting the banned anti-Arab Kach movement.
Last month, Sakhnin were fined 15,000 shekels ($4,000, 3,000 euros) for paying tribute in an on-pitch ceremony to Azmi Bishara, an Arab-Israeli former MP who fled Israel in 2007 after being accused of collaborating with Lebanon's Shiite militant group Hezbollah.
The Israel Football Association said the club had violated regulations and was guilty of "unbecoming conduct" by getting involved in a political dispute.