Violence erupted between hundreds of Eritrean asylum seekers and police on Saturday during a protest against an independence celebration organised by the Eritrean embassy in Tel Aviv, MENA reports.
Israeli media reported at least 130 people were injured, while the police said 27 officers were injured.
Three protesters were shot by live rounds after police officers said they felt “real danger to their lives”.
Israeli police in riot gear and on horseback tried to corral the protesters, who broke through barricades and hurled chunks of pavement, batteries and rocks at officers.
"Officers who feared for their lives used live fire against rioters," police added in a statement, noting that 27 of their members were wounded.
Police said they arrested 10 suspects "who assaulted police and threw stones" at officers.
There were further violent protests reported as Eritrea marked 30 years of independence at festivals in Europe and North America.
Tel Aviv's Ichilov Hospital said it treated 38 people wounded in the clashes, including a dozen with gunshot wounds.
Police said they were reinforcing their personnel in the area, with reports of clashes between Eritreans and police, as well as between supporters and opponents of Eritrea's government, continuing elsewhere in south Tel Aviv.
Eritreans make up the majority of the more than 30,000 African asylum seekers in Israel.
President Isaias Afwerki, 77, has led the nation in the Horn of Africa since 1993, taking power after the country won independence from Ethiopia in a long guerrilla war.
In Israel, Eritreans say they face an uncertain future as the state attempts to deport them. But many say they enjoy some freedoms including the right to protest.