Under the new attempt, Jerusalem - the Holy City will only be identified as Yerushalaim in all three languages. Nazareth (Al-Nasra in Arabic) in English will be identified as Natzrat and Jaffa (Jaffa in Arabic) will only be written as Yafo.
Though, currently road signs are written in three languages - Hebrew, Arabic and English, with the city names in each language. And Jerusalem, identified as Al-Quds in Arabic (along with Yerushalaim written in Arabic script), Yerushalaim in Hebrew, Jerusalem in English will now be written only as Yerushalaim.
According to Israel's YNet News, "The lack of uniform spelling on signs has been a problem for those speaking foreign languages, citizens and tourists alike," explains Yeshaayahu Ronen, head of the ministry's Transportation Planning Department.
"It impairs drivers' ability to find their way and we have decided to follow many other countries around the world and make the transliteration of all names correspond directly with Hebrew." Katz authorized Ronen's department to decide which signs would be replaced.
"Almost all Israeli communities' names have previous names. Some Palestinian maps still refer to the Israeli cities by their pre-1948 names, since they see them as settlements," said Katz.
"I will not allow that on our signs. This government, and certainly this minister, will not allow anyone to turn Jewish Jerusalem to Palestinian al-Quds."
The Transport Ministry told BBC news that changes would be gradual, and no existing sign would be changed unless it needs replacing due to wear.
YNet News said Arab Knesset members were infuriated by the proposal: "Al-Quds will remain al-Quds and Shfaram will remain Shefa-'Amr," said MK Ahmad Tibi of United Arab List-Ta'al.
"Minister Katz is mistaken if he thinks that changing a few words can erase the existence of the Arab people or their connection to Israel. This is a blatant attempt at harming the Arabic language and everything it represents."
Minister of Minority Affairs Avishay Braverman criticized the decision as well: "Road signs are not a political issue. Arabic is an official language in the State of Israel," he said.
"I would suggest the Minister Katz place much needed street signs in Arab communities before he changes road signs."
The move is also opposed by Islamic-Christian Front (ICF) in Jerusalem. According to Palestine news agency, ICF in Jerusalem say Sunday they oppose this move and they plan to hold a campaign in which they will compose a dictionary including all the names of archeological sites and streets of the holy city in Arabic.
Islamic-Christian Front Secretary-General Hasan Khatir announced dictionary project in a news conference in the West Bank city of Ramallah on Sunday, the report said.
Israel's one million Arab citizens make up about one-fifth of the population and they frequently complain of being marginalised and discriminated against by the Jewish-majority state. In between the two is the tiny Christian community who makes up about 2.1 percent of about 7 million population of Israel.