Muslim groups have been attempting to halt construction of the Museum of Tolerance because it is to be built on top of the cemetery, which dates back at least to the 14th century.
Haaretz published pictures it said were from the excavations showing full human skeletons and fractured human skulls. In one photo a skull is seen bearing multiple fractures. Another shows a skull peering through a mound of dirt.
The newspaper cited unnamed workers as saying that several skeletons and graves had been damaged during the excavation. It also quoted the lead archaeologist in charge of the dig Gideon Sulimani as saying that the job was rushed. Sulimani could not be reached for comment.
The museum will be modeled on an existing one in Los Angeles that opened in 1993 and receives over 250,000 visits a year. Organizers have said it will use interactive technology to present scenarios on social issues of the day including hate crimes and terrorism.