Three Arab-Israeli men and two women were killed near the northern city of Haifa, Israeli paramedics and Palestinian media said on Wednesday.
The five victims belonged to the same family in Basmat Tab'un and were shot at home, Palestinian news outlets said.
Israel's Magen David Adom emergency service said it responded to a call at 2.52pm to people who had sustained "different degrees of injuries".
They were all later pronounced dead.
Another man, 49, was wounded and taken to the intensive care unit in a nearby hospital, Palestinian state news agency Wafa reported.
Jafar Farah, director of Haifa-based NGO Mossawa, which focuses on Arab-Israeli rights, said there has been a 300 per cent rise in crimes against Arab-Israelis compared to the same period last year.
"These are clearly gang-related incidents," he told The National. "Often innocent people lose their lives."
Two of the victims in Wednesday's shooting were minors, he said.
"People have been evacuating their homes since it happened, in fear of retaliation," he added.
Earlier in the day, Atef Abu Kleib, 50, was also shot and killed in Haifa in "broad daylight", Palestinian and Israeli media outlets reported.
This year, 181 Arab-Israelis have been killed in the pre-1948 areas, Wafa reported.
