Israeli Prime Minister Benjamin Netanyahu announced on Sunday he would create a new ministerial team to look at the problem of high living costs.
The decision comes after more than 100,000 people took to the streets on Saturday demanding affordable housing and a reduction in social inequality.
The demonstrations, which have been growing steadily over the last two weeks, have led to the resignation of a top treasury official.
“We are paying close attention to the housing issue and the complaints about the high cost of living,” said Finance Minister Yuval Steinitz. “We will consider how we can ease these problems.”
“On the other hand as Finance Minister, I carry the responsibility to not allow Israel to fall into a state of economic anarchy,” he added.
Hundreds of doctors gathered outside the government compound on Sunday calling for additional state funding for Israel’s public health care system.
Medical workers are in a dispute over pay, staffing and working conditions, which is now in its 130th day.
Saturday’s march led some commentators to question whether Prime Minister Netanyahu could survive a revolt by the middle classes.
Polls show his personal approval rating has plummeted.
OECD figures suggest the gap between Israel’s rich and poor is among the widest in the developed world.