Israeli authorities on Wednesday released into house arrest an Arab Israeli who drove his car during the Jewish Yom Kippur holiday in an incident that sparked four nights of rioting in the northern town of Acre.

"The Haifa court decided to continue his detention but commute it to house arrest for a week," said police spokesman Eran Shaked.

"The court also suspended his driving licence for one month, because he is dangerous," Shaked told AFP.

Tawfik Jamal had spent three days behind bars, accused of reckless endangerment and "harming religious sensitivities," for driving on October 8 during the Yom Kippur holiday when Israeli Jews respect a religious ban on driving as the observant fast and pray.

At least three people were injured during the clashes that broke out after Tawfik drove through a conservative Jewish neighbourhood of Acre.

A group of Jewish youths assaulted him, accusing him of deliberately making noise and disrupting the sanctity of the Day of Atonement.

Hundreds of Arabs then took to the streets, damaging around 100 cars and 40 shops, according to police. Over the following four nights, Jewish and Arab rioters clashed with each other and with police.

Tawfik appeared before a parliamentary committee on Sunday to say he regretted his "mistake."

"If what I did caused this, I am ready to sacrifice my neck right here on this table... just to return peace and quiet back to the city of Acre, to bring coexistence back to its place," he said.

Arabs with Israeli citizenship, the descendants of those who remained in the Jewish state after the 1948 war that followed its creation, make up around 20 percent of the population.