Haaretz reported this today

The Tel Aviv District Court rejected a petition this week against a decision to lease land in Jaffa's Ajami neighborhood for the exclusive use of members of the religious Zionist community.

The petition, filed by Jaffa residents and human rights groups, challenged a decision by the Israel Lands Administration and the Tel Aviv municipality to lease the land in question to B'Emuna, a company specializing in housing complexes for the religious Zionist community. Its plan is to build three apartment buildings at the site.

The petitioners said the decision was discriminatory, because it would exclude anyone other than members of the religious Zionist community from purchasing an apartment in the complex, which is situated in a neighborhood where a majority of the residents are Arab. This is especially unfair given the shortage of available housing in the neighborhood, they argued.
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But in his ruling on Wednesday, Judge Yehuda Zefet said the ILA had acted properly in deciding that the only consideration for selecting the winner of the tender would be financial, thereby ensuring that the lease would go to the highest bidder.

Attorney Gil Gan-Mor of the Association for Civil Rights in Israel said afterward that the petitioners will appeal to the Supreme Court.

Kemal Agbariya, who heads the Ajami neighborhood council, said that activists and elected officials in the city also intend to organize protests.

The ruling was harshly criticized in Jaffa yesterday.

Omar Siksik, a neighborhood resident and city council member, said, "this is a group of people who publicly say they do not want coexistence. Many outsiders came to Jaffa and bought apartments. We complained about that a bit and said that the locals' housing shortage must be addressed first, but they knew they were coming to live next to Arabs. What bothers us is that they are bringing in extremists - and in the end, it will result in friction and in a blow-up of relations between Jews and Arabs."

Israel Zeira, director of B'Emuna, responded, "our ideology is not to enter an Arab neighborhood, but to go to Jaffa in order to bolster Jewish identity." The property in Ajami, he explained, was selected because it was the least expensive in the greater Tel Aviv region.

"We are going to blend into the city," vowed Zeira, who is also acting director of Rosh Yehudi, a group that aims to strengthen Jewish identity. He rejected criticism that the move would encourage segregation.