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 used 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.

The interior ministry has adopted more than 130 possible nationalities for Israeli citizens, most of them defined in religious or ethnic terms, with “Jewish” and “Arab” being the main categories.

The group’s legal case is being heard by the supreme court after a district judge rejected their petition two years ago, backing the state’s position that there is no Israeli nation.

The head of the campaign for Israeli nationality, Uzi Ornan, a retired linguistics professor, said: “It is absurd that Israel, which recognises dozens of different nationalities, refuses to recognise the one nationality it is supposed to represent.”

The government opposes the case, claiming that the campaign’s real goal is to “undermine the state’s infrastructure” – a presumed reference to laws and official institutions that ensure Jewish citizens enjoy a privileged status in Israel.

Mr Ornan, 86, said that denying a common Israeli nationality was the linchpin of state-sanctioned discrimination against non-Jews, especially Arab citizens, who comprise a fifth of the population.

“There are even two laws – the Law of Return for Jews and the Citizenship Law for Arabs – that determine how you belong to the state,” he said. “What kind of democracy divides its citizens into two kinds?”

Yoel Harshefi, a lawyer supporting Mr Ornan, said the interior ministry had resorted to creating national groups with no legal recognition outside Israel, such as “Arab” or “unknown”, to avoid recognising an Israeli nationality.

In official documents most Israelis are classified as “Jewish” or “Arab”, but immigrants whose status as Jews is questioned by the Israeli rabbinate, including more than 300,000 arrivals from the former Soviet Union, are typically registered according to their country of origin.

“Imagine the uproar in Jewish communities in the United States, Britain or France, if the authorities there tried to classify their citizens as “Jewish” or “Christian”,” said Mr Ornan.

The professor, who lives close to Haifa, launched his legal action after the interior ministry refused to change his nationality to “Israeli” in 2000. An online petition declaring “I am an Israeli” has attracted several thousand signatures.

Mr Ornan has been joined in his action by 20 other public figures, including former government minister Shulamit Aloni. Several members have been registered with unusual nationalities such as “Russian”, “Buddhist”, “Georgian” and “Burmese”.

Two Arabs are party to the case, including Adel Kadaan, who courted controversy in the 1990s by waging a lengthy legal action to be allowed to live in one of several hundred communities in Israel open only to Jews.

Uri Avnery, a peace activist and former member of the parliament, said the current nationality system gave Jews living abroad a far greater stake in Israel than its 1.3 million Arab citizens.

“The State of Israel cannot recognise an ‘Israeli’ nation because it is the state of the ‘Jewish’ nation … it belongs to the Jews of Brooklyn, Budapest and Buenos Aires, even though these consider themselves as belonging to the American, Hungarian or Argentine nations.”

Mr Ornan said indications of nationality on ID cards carried by Israelis made it easy for officials, including police officers, to discriminate against Arab citizens.

The government has countered that the nationality section on ID cards was phased out from 2000.

However, Mr Ornan said any official could instantly tell if he was looking at the card of a Jew or Arab because the date of birth on the IDs of Jews was given according to the Hebrew calendar. In addition, the ID of an Arab, unlike a Jew, included the grandfather’s name.

“Flash your ID card and whatever government clerk is sitting across from you immediately knows which ‘clan’ you belong to, and can refer you to those best suited to ‘handle your kind’,” Mr Ornan said.

The distinction between Jewish and Arab nationalities is also shown on interior ministry records used to make important decisions about personal status issues such as marriage, divorce and death, which are dealt with on entirely sectarian terms.

Only Israelis from the same religious group, for example, are allowed to marry inside Israel – otherwise they are forced to wed abroad – and cemeteries are separated according to religious belonging.

Some of those who have joined the campaign complain that it has damaged their business interests. One Druze member, Carmel Wahaba, said he had lost the chance to establish an import-export company in France because officials there refused to accept documents stating his nationality as “Druze” rather than “Israeli”.

The group also said it hoped to expose a legal sleight of hand that intentionally mistranslates the Hebrew term “Israeli citizenship” on the country’s passports as “Israeli nationality” in English to avoid problems with foreign border officials.