Police clashed with Jewish protesters in Acre on Friday on the third day of violence between Arabs and Jews as Foreign Minister Tzipi Livni travelled to the northern Israeli city to appeal for calm.

Police fired a water cannon at a crowd of about 200 people as some demonstrators hurled bottles and stones at security forces.

Chanting "death to Arabs," the protesters were headed from a predominantly Jewish neighborhood to the house of an Arab when police intervened.

The incident occurred hours after Livni, who is trying to form a new government and replace outgoing Prime Minister Ehud Olmert, issued in Acre what she said was "a message of reconciliation and cooperation to calm tempers within the population."

Police deployed an additional 500 officers to help the 200-strong local force after violence broke out on Wednesday night as Jews observed Yom Kippur, or Day of Atonement, the holiest day in the Jewish calendar.

Smashed shop fronts and damaged cars were shown on local television as main roads were barred and security helicopters flew over to maintain calm after violence erupted at midnight Wednesday on Yom Kippur.

The unrest erupted when an Arab motorist drove into a neighborhood where Arabs and Jews live, playing his car stereo loudly as ceremonies were underway, police spokesman Micky Rosenfeld said.

Scuffles broke out again Thursday as residents took to the streets after Yom Kippur ended. Jews chanted "Death to Arabs," while Arabs chanted "Allahu Akbar," and both sides hurled rocks at each other, local press reported.

Some 12 people—Arabs and Jews—were arrested since the first clashes broke out on Wednesday night, Rosenfeld said.

In addition, about 100 cars and 40 stores were damaged by Arab demonstrators, he said.

Local Arab Israeli parliamentarian Abbas Zakkour said dozens of people were injured by tear gas canisters and that some had been taken to hospital for treatment.

"We must guard vigilantly the ability to live together in co-existence in these towns," Israeli Prime Minister Ehud Olmert said in a statement.

But ultra-national MP Arieh Eldad denounced what he called "Arab pogroms".

"One should not be surprised if Jews take up arms to defend themselves while the police does nothing to protect them," Eldad said.

Arab MP Mohammed Barakeh, for his part, blamed "Jewish fascist gangs" which he said worked against the city’s Arab population "with complicity from the police."

Traditionally during Yom Kippur all vehicle traffic, except for emergency services, stops in Jewish parts of Israel.

Israel’s Arabs number about 1.5 million, about 20 percent of the population. They are descended from families that stayed while hundreds of thousands fled or were forced out during the 1948 Independence War.

They complain of discrimination and say the government fails to give the same funding to their towns, schools and other infrastructure as it does for Jews. Israeli officials deny any discrimination and note there are Arab parliamentarians.

Relations between the communities are mostly calm, although occasional breakdowns have occurred over the years, most recently in October 2000 when police killed 13 Arabs while trying to halt demonstrations.