 The gang photographed themselves doing Nazi salutes |
The eight suspects, aged 16-21, are all Israeli citizens from the former Soviet Union. They were arrested a month ago, but the news only emerged on Saturday.
Police say searches of their homes yielded Nazi uniforms, portraits of Adolf Hitler, knives, guns and TNT.
Israel was founded in the wake of the Nazi Holocaust in which millions died.
The arrests follow a year-long inquiry which began after a synagogue in Petah Tikva, a city east of Tel Aviv, was desecrated with graffiti of Nazi swastikas and the name of Nazi leader Adolf Hitler.
Prime Minister Ehud Olmert expressed his horror at what he called "violence for the sake of violence."
"I am sure that there is not a person in Israel who can remain indifferent to these scenes, which indicate that we too as a society have failed in the education of these youths," he said.
Tattoos
The eight accused, who include the group's alleged leader, are all from Petah Tikva.
The gang members sported tattoos popular with white supremacists - including the number 88, code for Heil Hitler because "H" is the eighth letter of the alphabet.
"We believe that this is the main gang working in the area... the main gang that exists [in Israel] that attempts to use Hitler's ideology," police spokesman Micky Rosenfeld told AFP news agency.
Police say the gang members would target homosexuals, Jews who wore a skull cap and drug addicts, often video taping their attacks.
"It is difficult to believe that Nazi ideology sympathisers can exist in Israel, but it is a fact," Revital Almog, the police official who led the investigation, told Israeli public radio.
Video tapes
The suspects have admitted assaulting a number of people in Tel Aviv, most of them foreign workers.
Ms Almog said the gang would pick on someone who appeared unable to defend themselves and then attack.
They often filmed or photographed the violence.
 An estimated six million Jews were killed in the Nazi Holocaust |
In one clip a man is hit around the back of the head with a bottle.
According to the Israeli daily newspaper Haaretz one video shows gang members surrounding a Russian drug addict as he admits to being a Jew. The youths then order him onto his knees to beg for forgiveness for being Jewish and a drug addict before viciously beating not only him, but also another man who tries to intervene.
The suspects all migrated to Israel under the Law of Return which allows anyone with at least one Jewish grandparent to become a citizen.
Ms Almog said of the accused, "their connection to Judaism is distant, through grandparents or distant family connections".
