JERUSALEM, Oct 18 (Reuters) - Prime Minister Benjamin Netanyahu wants to extend a loyalty oath for candidates for Israeli citizenship to include Jews as well as non-Jews, his office said on Monday.

The original amendment, which required only non-Jews to take a loyalty oath to the Jewish and democratic state of Israel, was denounced as racist by Israeli Arab lawmakers after it was approved by Netanyahu's government last week.

The Israeli parliament must ratify the amendment before it becomes law. Thousands of Jews and Arabs demonstrated on Saturday in Tel Aviv against the proposal, saying it went against democratic principles.

Under Israel's current immigration laws, Jews are granted automatic citizenship and non-Jews have to pledge loyalty to the state of Israel.

Some Israeli commentators said Netanyahu's backing of the measure promoted by his biggest coalition partner, the far-right Yisrael Beitenu party, may have been aimed at securing the support of its leader, Foreign Minister Avigdor Lieberman, for future peace moves with the Palestinians.

The legislation will have no bearing on the citizenship of Israel's Arab minority, who make up 20 percent of the population.

But the requirement to pledge loyalty to a Jewish state might deter Palestinians or other non-Jews who marry Israelis from applying for Israeli citizenship.

(Writing by Joseph Nasr, Editing by Michael Roddy)