The prolongation of the Arab-Israeli conflict is all about the illegal occupation, expropriation, colonisation, and annexation of Arab territory by Israel. And beneath the armour of the Israeli military machine is the systematic exclusion of the Other — the Arabs.

Jewish Israelis are xenophobic towards Arabs not so much because they fear them as an existential military threat, as Likud and Labour are prone to repeat, but rather because of the intrinsic demographic threat they present to the national identity of a Jewish State.

The Balfour Declaration helped create Israel as a homeland for the Jewish people; it did not stipulate a Jewish state. The exclusive nature of Israel's national identity would consolidate over the decades with contradictory implications for representative democracy.

These contradictions are now quite obvious particularly with the bellicose and racist policies of the Right-wing Likud government, led by Prime Minister Netanyahu and Minister of Foreign Affairs Avigdor Lieberman, renowned for openly calling for the expulsion of Palestinians in 1948 areas.

Europe is starting to see beneath the veneer of parliamentary democracy in Israel and is becoming more vocal and straightforward in its criticism of Israel's attempts to deny Palestinians in 1948 areas equal representation.

For example, the EU report on Israeli Arabs, leaked in November 2011, brings to light the preference given to Jewish graduates over Arab graduates within the same sectors. Only 450 Palestinians in 1948 areas were employed in software development in 2010, compared to 85,000 Jewish graduates in high tech.

Another indicator of the deteriorating democratic balance is that "only 1.7 per cent of the higher education system administrative staff is Palestinians in 1948 areas." They also face a geographical disadvantage by living in Israel's peripheral zones in the north or the Negev in the south.

The report states that "only around 120,000 Palestinians in 1948 areas, under 10 per cent of the total, live in mixed Jewish Arab towns and cities where there is greater access to both public and private employment."

Within the Israeli Parliament (Knesset) there is a group of Palestinians in 1948 areas, but "since the state's founding, they have only rarely been part of the governing coalitions". Increasingly, the Jewish groups, such as Shas, have joined the coalitions with direct implications for the more zealous Jewish colonising the West Bank and East Jerusalem.

The outspoken Palestinian Knesset member, Azmi Bishara, campaigned for the position of Israeli prime minister in 1999 before the law was changed to prevent any such challenge by an Arab contender. Why can't a Palestinian living in Israel be prime minister of Israel?

Azmi Bishara has been banned from Israel and resides in Doha, Qatar. The leader of the Arab Movement for Renewal within the Knesset, Ahmed Tibi, and the first Palestinian woman to join the Balad party, Haneen Za'abi, were suspended on different accounts for speaking out for their democratic rights.

Another example of exclusive passage to employment positions: a bill submitted by Israel Beiteinu members in November 2009 states that "Israeli citizens who have completed military or national service will be given preference when applying for positions in the civil service."

Discrimination

Then there are the 190,000 Bedouins of the Negev Desert who have been corralled into government-created townships except for approximately a third that live in "unrecognised villages" that are "subject to demolition at any time". The unrecognised village of Al Arakib was demolished 29 times during 2010-2011.

That statistic merits some reflection of what Israeli intentions are towards minority groups within their temporary borders. "Temporary" because Israel does not have borders… and still does not have a Constitution…

And then there is the ongoing racist desecration of churches, mosques and cemeteries by Jewish zealots. Europe watches in dismay, but baffled by the deterioration of democracy in Israel, Brussels continues to juxtapose support for Israel to be "an inclusive democracy" and "a Jewish state". This is impossible to reconcile and reveals a deep contradiction in EU policy-making.

Europe takes great pride in having separated the "two heads of the eagle" during the creation of the modern nation-state. But here we are endorsing Israel to mix religion and state again, essentially turning back the clock to the Middle Ages.

A last irony: the growing awareness about the abuse of minorities in Israel emanates largely from the Or Commission that investigated the October 2000 killing of 12 Palestinians in 1948 areas in Umm Fahm; the riot police were under the orders of then interior minister, Shlomo Ben Ami, who went on to be the lead Israeli negotiator at Camp David! There is a long way to go, a very long way, before Israel is ready to accept the Arabs, not to mention peace.