Some 400 children of illegal immigrant workers face deportation under a new residency criteria approved by the Israeli cabinet, Xinhua reported.
"The cabinet decided to allow most children of people working in Israel illegally, who meet the criteria established by the inter-ministerial committee on their status, to remain in Israel," a government statement said.
The Jerusalem Post said about 400 out of 1,200 children will be deported, the rest will be given permanent residency permits. The issue had been under discussion for a year.
Children studying in Israeli schools during the 2009-2010 academic year, residing in Israel for at least five consecutive years and speak Hebrew will not be deported.
Prime Minister Benjamin Netanyahu at a weekly cabinet meeting said: "On the one hand, this problem is a humanitarian problem. We all feel and understand the hearts of children. But on the other hand, there are considerations to ensure the Jewish character of the State of Israel."
The decision drew criticism from the UN Children's Fund (Unicef).
"The government of Israel must adopt a humane policy towards immigration, and replace its illogical 'revolving door' policy," it said in a statement, calling the decision "an infringement on the 'Convention on the Rights of the Child'."