"We're not asking for a privilege but justice; that our schools receive what other schools in Israel get," the Roman Catholic patriarchal vicar for Israel, Bishop Giacinto-Boulos Marcuzzo, told a crowd at the foot of the Basilica of the Annunciation in the northern city.
Christian schools in Israel stayed shut Tuesday, delaying the start of the new academic year, in a funding dispute with authorities in the Jewish state.
Traditionally, the schools received 65 percent of their budgets from the state, with parents paying the balance, as is the case with institutions recognised by the state but not considered official public schools.
But that figure was cut to 34 percent two years ago, sharply increasing the amount parents had to come up with.
Current state financing covers only 29 percent of the costs, said Marcuzzo, noting that the schools were short approximately 200 million shekels ($50.9 million/45 million euros).
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The strike affects around 33,000 pupils, mostly Muslim Israeli Arabs, at 47 schools run primarily by the Catholic church, and would only end when a solution was reached, said Marcuzzo, who is bishop of Nazareth.
"If Christian schools are threatened, in the long run, it is the very Christian presence in Israel that is threatened," he told AFP.
Marcuzzo said they were relying on Christians of all denominations mobilising, and that Pope Francis himself would raise the matter in a Thursday meeting in the Vatican with Israeli President Reuven Rivlin.
"The Holy See will certainly discuss the issue," he said.
Demonstrators at the site where Christians believe the Virgin Mary was told by the Archangel Gabriel that she would give birth to Jesus were holding banners accusing the government of seeking to put an end to Christian schools and demanding full state funding for the institutions.
Christian schools and Israeli authorities have been in tough talks for a year and a half over state funding for them and their 3,000 employees, but with no results.
"We've tried everything and have no option left but to go on strike," said Botrus Mansour, spokesman for the schools.
The education ministry said "there has been no cut in the (funding) of the last year, and there will be no cut in that of the upcoming year," noting that it would continue its dialogue with the schools.