The life-sized sculpture showing the Ronald McDonald clown on a cross has been at the centre of an exhibition about consumerism and religion. Other pieces depict Jesus and the Virgin Mary as Ken and Barbie children's dolls.
Protests became violent on Friday. Police said they arrested one man on suspicion of assault and were searching for two others people who threw firebombs at the Haifa Museum of Art.
Three police officers were hurt as dozens of protesters tried to forcibly enter the museum, police said. Panes of glass along its entrance were smashed. Protests continued on Saturday.
"I object to this disgraceful sculpture," said Nicola Abdo, a Haifa resident and protester. "As a Christian person ... I take deep offence to this depiction of our symbols."
The mayor of the Jewish-Arab city of Haifa said on Thursday the sculpture would be taken out of the exhibition following consultations with church leaders.
"The sculpture will be removed and returned as soon as possible," Einat Kalish Rotem tweeted. "We regret the aggravation the Christian community experienced ... and the physical injury and violence that surrounded it."
She did not say when it would be removed, but it had been due to be returned to the Finnish museum that loaned it last year at the end of the month.
Christian Arabs, who make up around 2 percent of the Jewish majority country's population, found a champion for their anger in Miri Regev, the culture minister whose censure of art deemed pro-Palestinian has made her a darling of the Israeli right.
Citing the injury to religious sensitivities, Regev had threatened to cut state funds to the museum. Israel's Justice Ministry slapped her down, arguing she had no such authority.
The McJesus sculptor, Jani Leinonen, from Finland, had also demanded that the exhibit be removed as he was boycotting Israel in solidarity with the Palestinians.
Others saw in Thursday's decision a chance for reconciliation."The winner today is the people of Haifa,” said Wadie Abu Nassar, an adviser to local church leaders. "The removal of this sculpture is a reflection our desire to coexist in the city."