"There was an incident in which graffiti was written on a mosque in the city of Umm al-Faham," police spokesman Micky Rosenfeld told AFP, adding that the words "Arabs Out" were painted in Hebrew.
"Such incidents aim to harm relations between Arabs and Jews," Israeli news site Ynet quoted the mosque's imam, Jamil Mahagna, as saying.
"We demand the arrest of the criminals," he added.
It was the latest in a string of racist and religious attacks over the past few weeks.
Last month vandals slashed the tyres of more than 40 cars in Arab east Jerusalem, spraying a slogan reading: "Gentiles in the land are enemies.