OCCUPIED JERUSALEM: Two Arab-owned vehicles were set alight in annexed east Jerusalem overnight in an apparent "price-tag" attack by right-wing activists, Israeli police said on Wednesday.

"Last night, unknown individuals set fire to two cars in the neighborhood of Sharafat," police spokesman Micky Rosenfeld told AFP, referring to an Arab district in the southern sector of east Jerusalem.

"We found the words 'Price tag' at the site," he said, indicating an investigation had been opened.

"Price tag" is a euphemism for a revenge hate crime by Israeli extremists which normally target Palestinians and Arabs, but which recently have also been directed at left-wing activists and the army.

The attacks, which generally take place in the West Bank, tend to involve the vandalism or destruction of Palestinian property, and have included several arson attacks on mosques.

But Arab neighborhoods inside Israel, as well as the offices of Peace Now and the home of one of its key activists have also been vandalized and sprayed with threats.

Last month, a mob of angry settlers attacked an army base in the northern West Bank, vandalizing vehicles in an act which deeply angered the Israeli leadership.

Such attacks have generally been carried out in response to state activity to remove unauthorized settlement outposts.

But Palestinians say Israeli officials have failed to pursue attackers and only began to condemn the incidents when Israeli military personnel and materiel was affected.