Dan, Robert,
Quite right, this does look like Photoshop... This is cheap, it looks like Arab propaganda.
Maybe it was fabricated by the same person who recently brought to us a post about Jews calling for a Holocaust although there was no mention of a "Holocaust" in the actual Hebrew words told by the Jews who were demonstrating ?
I know that Judenrat Richard Silverstein claimed that Israeli settlers burned Israeli flags. If that's where the source comes from, it's dubious, to put it mildly...