As violence grips Jerusalem and other cities, a climate of suspicion has threatened even the most basic interactions between Jews and Israeli Arabs, not to mention Palestinians.
Israeli authorities have long sought to stress the diverse nature of their society, with Israeli Arabs and Jews living together.
But while some cities are relatively integrated, on the whole the two communities live parallel existences.
Arab Israelis account for some 17.5 percent of Israel's population.
They are descendants of Palestinians who remained after the creation of Israel in 1948 and are largely supportive of Palestinians in the occupied territories.
A series of gun, knife and car-ramming attacks against Jews as well as ongoing clashes between security forces and Palestinian protesters has worsened mutual mistrust.
In the streets of Jerusalem and other cities, Israelis are frightened by random knife attacks, while Palestinians and Israeli Arabs fear being caught up in mob justice or shot by police.
Some Israeli politicians have begun encouraging civilians to carry guns, while offices have employed armed guards.
The tense atmosphere has led to tragic mistakes.
In the most grim example, an Eritrean died after he was shot and then attacked by a mob on Sunday when he was wrongly thought to be involved in a gun attack that killed a soldier and wounded about 10 others.
Hossam, a Palestinian student in annexed east Jerusalem, lives only three tram stations away from his work in a restaurant west of the city, but he takes a taxi because his mother is worried, checking up on him with dozens of text messages per day.
He said he feels constantly watched.
"If I walk with my hands in my pockets, to (Israelis) that might mean I have a gun in that pocket," he said.
Omar Jamjoon, a 20-year-old Arab employee at the Israeli bus company Egged, said he was recently assaulted by a group of Israelis after finishing work at 5:00 am.
- 'What does that make me?' -
An upsurge in violence since the start of the month has seen eight Israelis killed in attacks.
Some 49 Palestinians and one Arab Israeli have died, including alleged attackers and those killed in clashes with Israeli security forces.
Many of the attacks have seen young Palestinians stab and wound Israelis before being shot dead.
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Besides the attacks, violent protests have also erupted across the Palestinian territories.
At least four Israeli cities, including commercial capital Tel Aviv, have banned labourers -- the vast majority of whom are Arabs -- from entering schools during classroom hours for fear of attacks.
Dana, a 44-year-old Jewish mother, said she was afraid to go onto the streets to buy sandwiches.
"How can a 13-year-old stab another child the same age," she asked, referring to an attack earlier this month.
"My husband is a building contractor and he has fired 18 (Arab) staff and has only two left because he was scared that any one of them could stab them.
"He has replaced them with Jews and will pay double the price at least, but he will feel safe."
Islil Reich, a 24-year-old Israeli cafe worker, said she considered herself open, but her attitudes were changing.
"We don’t know if being frightened is racism," she said.
"I walk down the street and I see an Arab and I am a bit scared. I know I am not a racist and I don’t hate Arabs, but I am scared. So what does that make me?"
- Long-term trend -
While the recent violence has worsened the problem, there has been a long trend of increasingly hardening attitudes, according to Sammy Smooha, an Israeli Arab professor of sociology at the University of Haifa and who has run a survey of Arab-Jewish relations.
He said attitudes towards coexistence have consistently declined in recent years, particularly in Arab communities.
The percentage of Arabs not prepared to have a Jewish friend almost doubled to nearly 30 percent between 2003 and 2009.
Israeli attitudes have also firmed, though not at the same rate.
"Since 2003, following... the repression of the last intifada (Palestinian uprising), the Arabs in Israel have been on a trend of hardening their views about Israel."
An updated study is due to be published at the end of next month, and Smooha expects the negative trend to continue.
"In the last two years... there are a lot of things such as the Gaza war which probably hardened Arab attitudes."
For many the principle of coexistence, as desirable as it might sound, is a pipe dream.
Last Saturday, under the slogan "Jews and Arabs refuse to be enemies," Israeli leftists organised what they billed as a mass protest against tensions.
Only about 2,000 people turned up, while those that did were confronted with a smaller but determined group of Orthodox Jews shouting "traitors".