Netanyahu said the bill is a response to Israel’s Arab critics who question the country’s right to exist.
Mohammed Abdelkarim, whose mother and sisters were inside the house when it was set alight, says Hebrew slogans were scrawled on the house.
Four rockets were fired in the past 24 hours, the military said, without elaborating on the test or type of rockets fired.
Streets are subdued, marketplaces are quiet and people are on edge in Jewish areas of Jerusalem.
The house demolished in the Silwan neighborhood near the Old City belonged to Abdel Rahman al-Shaludi.
A Palestinian attack, killed 5 and left blood-smeared books and shawls on the floor of a synagogue in Jerusalem.
Israel vowed harsh retaliation Tuesday for a Palestinian attack that killed five people.
UN Secretary General Ban Ki-moon strongly condemned an attack on a synagogue in West Jerusalem.
Israel will not cooperate with a United Nations inquiry into its 50-day war with rocket-firing militants in Gaza.
Israeli authorities gave preliminary approval for construction of 200 new homes in a Jewish area of east Jerusalem.
Palestinian President Mahmoud Abbas accused Israel on Tuesday of leading the region toward a “religious war”.
Home Minister Rajnath Singh was in Tel Aviv in a demonstration of India’s new warmth towards Israel.
Highest-ranking US military officer said that Israel went to “extraordinary lengths” to limit civilian casualties.
Palestinians have repeatedly clashed with police at the site.
Palestinians are urging UNSC to demand that Israel stop incitement against Muslim holy sites in Jerusalem.