Jerusalem: Israel's streets witnessed an unprecedented outpouring of public anger, capped by nearly 300,000 citizens joining protests to demand 'social justice', forcing Prime Minister Benjamin Netanyahu to scramble for a solution to calm discontent over rising cost of living.

The unexpectedly large turnout on Saturday in support of the demand that the government address socio-economic issues easily eclipsed any previous such demonstrations in the Jewish state's history.

Initially, Netanyahu's aides reportedly dismissed the protesters, saying they had come out to witness performances by leading musicians, but the unexpectedly huge numbers across the country has pushed the government on the back foot.

Though the government does not face any immediate threat of being dislodged, the wave of protests during the last three weeks has underscored the potential electoral impact of a burdened middle class rallying under the banner of "social justice".

Bowing to the protesters, Netanyahu, a champion of free market economy, announced this morning at the weekly cabinet meeting the appointment of a committee of experts to propose social-economic reform.

The team will be headed by Harvard-educated Professor Manuel Tranchtenberg, Chairman of the Planning and Budgeting Committee of the Council for Higher Education, and will also include academics and experts from the private sector.

"We will listen to everyone... We won't be able to please everyone, but we will have a real dialogue," said a defensive Prime Minister.

"It is not normal that while the country is rich, an overwhelming size of its citizens are poor," Dario, a student leader from Tel Aviv University participating in the protest march, said.

The team set up by the prime Minister will also include Finance Minister Yuval Steinitz and Education Minister Gideon Sa'ar, besides ministers looking the housing, labour, trade, industry and environment portfolios, among others.

The demand for social justice, the protesters said, is an effort to seek the bridging of the increasing socio-economic gap in the country.

"The demonstrations and anger expressed on the streets clearly show that Israeli citizens are normal human beings with aspirations for a quite life with a normal future for their children," he said.

"They have realised that security related issues cannot alone continue to dominate the political agenda of the country," he said.

Prime Minister's spokesman, Gidi Shmerling, told Army Radio that the team's conclusions will be made public in a month.

According to sources in Netanyahu's office, the team will focus on lowering the costs of living, limiting monopolies, reducing indirect taxes, tacking the bureaucracy in the housing market and putting into effect the national housing committees law.

The protest organisers, a loosely organised group of young Israelis, themselves stunned by the massive response to their complaints, have called for a million-person march in 50 cities across the country on September 3.

While they have sought to steer clear from appearing political in their calls for reform, the mass rallies have given voice to the growing wealth disparity and what critics contend is an inequitable distribution of resources.

"Forty years have passed since the day I stepped out, instilled with faith, against the injustice surrounding me.

Since then, year after year, I've been waiting for a new generation to stand up against injustice ? and here it is," legendary social activist, Charlie Biton, who was among the leaders of a protest movement against the government in the 1970s, told the demonstrators in Tel Aviv.

"My hope withered from year to year, as injustice grew...

But now, after 40 years, my vision has been realised," he said.

The leaders of the protest movement have vowed not to rest in the laurels of Saturday's success and to continue their struggle to bring it to a logical conclusion.

"We respect the Prime Minister's choice, and I hope that the size of the team won't affect it effectiveness. In any case, we expect to know in advance what the structure of the talks will be, and guarantees that the solutions adopted will be implemented so that we won't find ourselves talking round and round a round table for nothing," Student Union chairman, Itzik Shmuli, said.

"Yesterday's protest again proved that the People of Israel are emerging from their homes. The people are coming out and demanding great things, and we have no intention of giving up on any demand," the protest's campaign headquarters said on Sunday.

"We had 30 seconds of euphoria yesterday that was it - we're now moving forward," they added.

Israel has projected a growth of 4.8 per cent this year at a time of economic stagnation in the West, and has a relatively low unemployment rate at 5.7 per cent.

However, business cartels and widening social gaps have kept many citizens from feeling the positives.

The right-wing dominated coalition government has vowed to free up more state-owned land for development, build more low-cost housing and improve public transport, yielding to growing social discontent.

It also wants to lower dairy prices with more imports and boost medical staff numbers to address demands by striking doctors.

Demands put forward by the National Union of Israeli Students go much further, calling for an expansion of free education and bigger government housing budgets.

The protests nationwide drew Israelis of all walks of life, including students, public sector workers and social activists.

Some of Israel's top music performers, including Shlomo Artzi, Yehudit Ravitz and Rita, took the stage in Tel Aviv to support the protesters.

Many local analysts have lauded the protests as signs of "real democracy at work" and "a new independence for Israel".