Why there are no 'Israelis' in the Jewish state :: Citizens classed as Jewish or Arab nationals http://usa.mediamonitors.net/content/view/full/73048

"International Zionist organisations representing the diaspora, such as the Jewish National Fund and the Jewish Agency, are given in Israeli law a special, quasi-governmental role, especially in relation to immigration and control over large areas of Israeli territory for the settlement of Jews only." A group of Jews and Arabs are fighting in the Israeli courts to be recognised as “Israelis”, a nationality currently denied them, in a case that officials fear may threaten the country’s self-declared status as a Jewish state.

Israel refused to recognise an Israeli nationality at the country’s establishment in 1948, making an unusual distinction between “citizenship” and “nationality”. Although all Israelis qualify as “citizens of Israel”, the state is defined as belonging to the “Jewish nation”, meaning not only the 5.6 million Israeli Jews but also more than seven million Jews in the diaspora.Critics say the special status of Jewish nationality has been a way to undermine the citizenship rights of non-Jews in Israel, especially the fifth of the population who are Arab. Some 30 laws in Israel specifically privilege Jews, including in the areas of immigration rights, naturalisation, access to land and employment.