The Israeli Supreme Court on Thursday turned down a petition against a law that legalize budget reduction to any state-funded bodies that mark the Israeli inception more than 60 years ago as a day of "disaster."

Adalah, a legal center for Arab minorities in Israel, submitted the petition together with some Jewish and Arab citizens, the Ha' aretz daily reported.

In March, the Israeli parliament, or Knesset, passed a ruling that allows the Finance Ministry to slash budget of any state- funded body that marks the Nakba Day ("disaster" in Arabic).

Palestinians annually observe the Nakba Day to mourn over Israel's creation on May 14th, 1948.

While the "Nakba Law" does not ban commemoration, it forbids any groups from exploiting the date's significance to defame the Jewish country.