Moreover, those non-Jewish inhabitants (Arabs) who were not driven away or did not leave the country after 1948 or who returned there by 1952 were also entitled to Israeli citizenship. Thus, today an Arab minority of Muslim, Christian and Druze faith comprising about 1.4 million people live as citizens in Israel. Although they in fact have the same individual rights, they are de facto disadvantaged, in many cases.
Israeli law does also provide for, as a matter of principle, the naturalisation of foreigners; however, this option is tied to a large number of conditions. In addition, it lies within the discretion of the Ministry of the Interior and has, to date, played a subordinate role. With some exceptions, the latest Israeli policy tends towards the opposite direction: in July 2003 the Israeli parliament (Knesset) adopted a law by which the granting of residence permits or of Israeli citizenship to Palestinians from the Occupied Territories is prohibited, even if immigration is to be in the context of family reunification. According to the Citizenship and Entry into Israel Law, Palestinians who marry Israeli citizens can be granted neither residence status nor Israeli citizenship. The law, which takes the form of a regulation extended annually by a vote of Parliament, is officially justified as being in the interest of Israeli security.
The law runs counter to both the international practice of family reunification and the civil rights standards of western democracies and petitions called for the Supreme Court to review the plan. The latter, however, approved it by a small majority, imposing limiting obligations on the legislator. In both 2005 and 2007 small amendments were made. Firstly, the Ministry of the Interior may now, in individual cases, grant women over 25 and men over 35 years of age, plus children younger than 14, temporary residence, signifying a slight easing of the law. On the other hand, the scope of the law was recently extended to the effect that members of families from "enemy states" (listed in the law as Syria, Iran, Iraq and Lebanon) are also excluded from rights of residency and citizenship. The current legal regulation, against which once again an appeal has been made to the Supreme Court, is valid until the 31 July 2008.
Israel is still rightly considered to be the only democratic state in the Middle East. Yet its democracy is subject to certain restrictions, particularly in the area of citizenship. Critics stress that the law on citizenship and immigration robs the Arab minority of some of their civil rights and aims exclusively to keep to a minimum the number of Palestinians with a permanent right of residency or Israeli citizenship. It is said to be the expression of a form of control that regards equality and individual freedom not, in the sense of liberal democracies, as universal rights for all groups and minorities, but rather gives preference under ethnoreligious criteria to the Jewish majority – a non-democratic "ethnocracy". In Political Science, the classic model of Israel as an "ethnic democracy" assumes, by contrast, that the system of government and political processes functions as a matter of principal on the basis of the same rights and principles for all citizens and guarantees the exercise of these basic rights. However, the majority ethnic group controls the state institutions while adhering to democratic rules. Accordingly, "ethnic democracy" is a diminished form of democracy; dominance is manifested through democratic majority decisions.
Israel´s Palestinian citizens find this discriminatory. Despite clear discrimination in education, income and accommodation, the majority are by no means dissatisfied with regard to their personal opportunities for development in the country, and in particular their economic, educational and professional opportunities. Nonetheless the legal situation is perceived to a large extent as unacceptable. More than 90 % of Arab Israelis acknowledge the right of Israel to exist. A majority, however, wishes for conversion to a consensus democracy – a binational political polity in which no population group is preferred by the state.