National Security Minister Itamar Ben-Gvir ordered the police on Sunday to remove any Palestinian flags flown in public spaces.
"It is inconceivable that lawbreakers will wave terror flags, incite and encourage terrorism," Ben-Gvir said late Sunday night.
"I have issued instructions for the removal of the flags, which support terrorism, from the public space and to stop incitement against the State of Israel.
"Freedom of expression does not extend to identifying with a terrorist and those who want to harm IDF soldiers," he said.
He ordered Police Commissioner Kobi Shabtai to instruct his officers to remove the flags, explaining that flying them shows support for a terror organization.
The order went further than the demand the Otzma Yehudit Party had placed in its coalition agreement, which called for banning Palestinian flags in public institutions or those that received support from the state.
He issued the order after Palestinian flags were flown during an anti-government protest in Tel Aviv on Saturday night.
Netanyahu accuses anti-government protesters of incitement
Earlier in the day, Prime Minister Benjamin Netanyahu accused the demonstrators of incitement, taking issue with the flying of Palestinian flags, signs that compared Justice Minister Yariv Levin to a Nazi and one that said, "Free Palestine from the Zionist colonial rule."
"This is wild incitement that went without condemnation by the opposition or the mainstream media," Netanyahu said.
"I demand that everyone stop this immediately," he said.
Police had worked to remove Palestinian flags from public spaces under the former government led first by former prime minister Naftali Bennett and then by his successor Yair Lapid.
Among the more well-publicized instances in which police removed Palestinian flags from the public sphere was the funeral of slain Al Jazeera correspondent Shireen Abu Akleh last May.