Israel has arrested a correspondent for Iran's Arabic-language television in the annexed Golan Heights, police said on Wednesday.

Al-Alam news channel identified the journalist as Bassam al-Safadi.

The U.N.'s special coordinator for the Middle East peace process on Wednesday accused a key ally of Israeli Prime Minister Benjamin Netanyahu of "killing hope" for a settlement.

Nickolay Mladenov spoke after a minister from the Jewish Home party, which holds several portfolios in Netanyahu's rightwing government, declared the party would never support a two-state solution.

Israel released a Jewish extremist from 10 months of detention without trial on Wednesday, the longest a Jew has ever been held under the controversial powers usually reserved for Palestinians.

Meir Ettinger, 24, was one of a number of Jewish extremists interned by Israel last year after a firebombing in the West Bank killed a Palestinian toddler and his parents, triggering an outcry over the apparent impunity of the perpetrators of such attacks.

Israeli authorities have arrested three Palestinian teenagers over the stabbing of two Israeli women in their 80s earlier this month, police said on Monday.

"Three Arab suspects have been arrested, minors, residents of Jabal Mukaber" in Israeli-annexed east Jerusalem, a police statement said.

Israeli police said Sunday they had completed a probe into allegations Prime Minister Benjamin Netanyahu and his wife used public funds for their private villa, with the findings now passed on to prosecutors.

A key party in Israeli Prime Minister Benjamin Netanyahu's newly expanded right-wing coalition threatened to bring it down on Sunday over a demand related to the military.

The Jewish Home party, whose leader Naftali Bennett is a political rival to Netanyahu, said it would vote against the expanded coalition in parliament if its demand was not met.

Israeli Prime Minister Benjamin Netanyahu suffered his second cabinet resignation in a week on Friday when a minister quit over the appointment of a hardline nationalist in the "extremist government".

Environment minister Avi Gabbay announced his resignation in a strongly worded statement that accused Netanyahu of putting the country on a path to ruin.

Avigdor Lieberman, set to become Israel's defense minister, worked as a nightclub bouncer as a young man before embarking on a political career marked by anti-Arab tirades and strident populism.

The appointment of a hardline right-winger as Israel's defense minister represents a "real threat" to regional stability, a senior Palestinian official said on Wednesday.

"The existence of this government brings a real threat of instability and extremism in the region," Palestinian chief negotiator Saeb Erekat told AFP, adding that the appointment would "result in apartheid, racism and religious and political extremism."

Israeli Prime Minister Benjamin Netanyahu joined forces on Wednesday with a hardline nationalist party to expand his coalition, forming what is being called the most right-wing government in the nation's history.

Avigdor Lieberman and his Yisrael Beitenu party will add five lawmakers to Netanyahu's previously wafer-thin majority if the deal is given parliamentary approval as expected.