The demonstration outside the prime minister's residence spilled over into violence as hundreds of young Israelis marched through the streets of downtown Jerusalem, clashing with police, setting garbage bins on fire and damaging property.
"You are out of touch, we are fed up", one poster read.
However, "there will be no restriction on leaving one's home", it added.
The new steps were "to prevent a general lockdown in light of the sharp increase in the morbidity of the coronavirus". But cases have soared in the weeks since restrictions were lifted, with Israel reporting around 1,900 new cases on Thursday alone.
Netanyahu has been under growing public criticism over his handling of the coronavirus outbreak and the ensuing economic crisis, as many Israelis believe his government had not done enough to halt the pandemic and help the soaring number of unemployed people. But it can cause severe illness or death, particularly in older patients or those with weakened immune systems.
Whereas the initial virus outbreak was concentrated predominantly in the country's ultra-Orthodox and Arab communities, whose populations often live in poorer, crowded conditions, the Health Ministry has warned that the disease is now spreading more widely.
The government announced the measures in the early hours of Friday morning, following a marathon emergency cabinet session called after daily infection rates climbed to close to 2,000.
Thousands also protested in Tel Aviv on Saturday to voice frustration at Netanyahu and his economic policies.
The financial support, part of a general aid package of 90 billion shekels announced last week, must still be approved by the government, Netanyahu said.
Another demonstrator, Aramit Lotem, said Netanyahu had painted any dissenting voices as those of traitors. "The prime minister and finance minister are the ones who ultimately make the decisions".
"Further, we note the concerns raised by the Special Rapporteur that this annexation plan would potentially have negative impacts on the human rights of Palestinians living in the occupied West Bank and the Jordan Valley and lead to forcible displacement of thousands of Palestinians", Dayani Mendis said.
Bank of Israel Governor Amir Yaron and Foreign Minister Gabi Ashkenazi of the centrist Blue and White party that has partnered with Netanyahu's Likud in the government, said the money should instead be targeted at the poorest citizens.
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