The Shin Bet security service has concluded there is insufficient evidence to blacklist the extremist right-wing group Lehava, according to a Tuesday report.

The assessment could come as a setback for Defense Minister Moshe Ya’alon, who began working with the security agency and legal experts to build a case aimed at banning the radical anti-assimilation group Lehava earlier this year.

On Monday, Ya’alon vowed to lead an “uncompromising” fight against Jewish terror, after two high profile attacks last week by suspected Jewish extremists left two people dead and many more injured.

Lehava opposes the assimilation of Jews, and activists regularly rally against personal or business relationships between Jews and non-Jews, including outside at least one wedding between a Jewish woman and an Arab man.

Many of its senior members are affiliated with Meir Kahane, a leader of the Jewish ultra-nationalist movement.

“The conclusion at this stage is that there is insufficient evidence to declare the organization illegal,” the Shin Bet told Haaretz in a statement published Tuesday.

According to the report, the security agency said it would reconsider its assessment if new evidence against the nationalist group emerges.

Ya’alon’s initiative came shortly after a number of members of Lehava were arrested and charged in connection with an arson attack on a bilingual Hebrew-Arabic School in Jerusalem last November.

Since then however, state prosecutors have not handed down an indictment to its leader Bentzi Gopshtain or any of the members of the group for inciting to violence or acts of terror motivated by racism.

Children sit next to a wall in the Arab-Israeli village of Abu Ghosh on June 18, 2013 where anti-Arab graffiti was sprayed overnight. The graffiti reads “racism or assimilation” and “Arabs out.” (photo credit: Flash90).

Children sit next to a wall in the Arab-Israeli village of Abu Ghosh on June 18, 2013 where anti-Arab graffiti was sprayed overnight. The graffiti reads “racism or assimilation” and “Arabs out.” (photo credit: Flash90).

Classifying Lehava as an illegal organization would allow authorities to search the group’s possessions and confiscate its assets and real estate. Should authorities choose to take a step further and classify Lehava a terror organization, its members would almost certainly face indictments.

Ya’alon, Zionist Union MK Tzipi Livni and opposition leader Isaac Herzog have all come out in favor of calling Lehava a terror organization.

In November, three young Lehava members were formally charged on Monday for an arson and vandalism attack on Jerusalem’s Max Rayne Hand in Hand bilingual (Hebrew-Arabic) School, after having confessed to the crime during questioning.

Although the three suspects were charged with arson, breaking and entering and vandalism, they were not charged with a hate crime, despite the nationalistic and anti-Arab graffiti found at the school.

Following last week’s attacks on a Palestinian family in the West Bank that left an infant dead, and a fatal stabbing at the Jerusalem gay pride parade, both apparently by Jewish extremists, radical groups like Lehava have been thrust into the spotlight again.

Politicians from across the political spectrum decried the deadly attacks, with some blaming the government of turning a blind eye to Jewish terrorism.

“If I were prime minister, I would instruct the Shin Bet to deal with Jewish terrorism like Islamist terrorism,” Herzog said on Saturday. “With determination and not with a wink.”

The head of the left-wing Meretz party also came out strongly against Jewish extremism last week, and said right-wing incitement against Arabs and Palestinians was to blame for the fatal attacks.

“The hatred [that led] to the killing has a name,” Zahava Gal-on said before pointing to Lehava and Kahane activists as well as rabbis and community leaders who promote their activities and ideology.

Lehava is believed to have formed around 2009 when a few different groups working to “save” Jewish girls from seduction by non-Jews (namely Arabs) joined forces. The group is known for demonstrating against Arabs, African asylum seekers and Christian presence in Israel.

In December, Gopshtain said that his organization does not act illegally and accused the Shin Bet of trying to frame Lehava to thwart its “holy work of saving the daughters of Israel.”

Last week, Lehava members held a so-called “humanitarian” intervention against the Jerusalem gay pride parade. During the parade an ultra-Orthodox extremist fatally stabbed 16-year-old Shira Banki and injured five others.

Times of Israel staff contributed to this report.