About 80,000 people have been told to evacuate their homes as wildfires swept into Israel’s third largest city of Haifa.
The fires follow a two-month drought and are being fanned by strong winds in the north of the city.
Wildfires are also threatening homes near Jerusalem and in the West Bank.
Israel’s police chief said arson was suspected in some cases and PM Benjamin Netanyahu said any such attacks would amount to “terror”.
“Every fire that was the result of arson or incitement to arson is terror in every way and we’ll treat it as such,” he was quoted by Haaretz newspaper as saying.
“Anyone who tries to burn parts of the state of Israel will be severely punished.”
Police chief Roni Alsheich said that if fires had been started deliberately it was “safe to assume… it is politically-motivated”.
The comments brought an angry reaction from Palestinian President Mahmoud Abbas’s Fatah movement, which said Israeli officials were “exploiting the fire” to accuse Palestinians.
“What is burning are our trees and our land of historical Palestine,” it said in a statement.
On social media, the Arabic-language hashtag #Israel_on_fire began trending, with most tweets expressing pleasure over the outbreak.
Public Security Minister Gilad Erdan told Channel 10 TV news that eight people had been arrested.
He said arson was suspected in about half of the fires and police had found “flammable materials and liquids poured in certain areas”.
“We need to be prepared for a new type of terror,” he added.
Israeli media reported that the Shin Bet internal security agency was involved in the investigation.
Meanwhile, hundreds of military reservists have been called up to help battle the three-day outbreak of fires.