There's no such thing as Israeli nationality. Everyone gets classified as a different 'nationality' in Israel (Jewish, Arab etc). And if you're not Jewish, it is a legal fact that you lack that belongingness, so it's inherently racist.
Here's an article from Haaretz:
Supreme Court's only Arab judge: Rampant discrimination against Arabs in Israel Equality spoken of in Israel's Declaration of Independence 'not happening,' says Salim Jubran, adding that Arab leadership also to blame.
By Revital Hovel | Nov. 27, 2014 | 1:18 AM
Supreme Court Justice Salim Joubran, the only Arab on Israel’s Supreme Court, said Wednesday that Arabs are discriminated against in Israel.
“I could spend hours or even whole days speaking about equality, but I want to quote from the Declaration of Independence and you judge,” he said, speaking to a prosecutors’ training conference in Eilat. “The Declaration of Independence speaks specifically about equality, and unfortunately it’s not happening in the field. A sentence from the Or Commission report sums it up: The state’s Arab citizens live in a reality of being discriminated against.”
Joubran went on to list those areas in which discrimination exists. “There are gaps in education, employment, land allocations for construction and community expansion, a lack of industrial zones, a lack of infrastructures, and the Arabic road signs contain many errors,” he said, adding that the Arab leadership bears a share of the blame.
“When I complain about the establishment I’m also complain about ourselves; Arab community leaders must also take responsibility and deal with the problems of the Arab sector. They also have to fight and demand and meet with ministers to close the gaps,” he said.
Joubran's remarks came at a time of a sharp rise in tensions relating to the legal and social status of Israel's Arab minority. Passions are high due to Netanyahu's pushing forward of the 'Jewish nation-state' bill draft, a quasi-constitutional Basic Law which defines Jewishness as the default nature of the state in any instance, legal or legislative, in which the state's Jewishness and its democratic aspirations clash.
Among the accomplishments in the Arab sector Joubran noted progress in education and the health fields. “When it comes to education we have good schools, but they are church schools, not public schools. There has been progress in the medical field; public sector medicine has opened its doors to the Arab sector. There has been significant progress with regard to the status of women; today there are more Arab, Bedouin, and Druze female students.”
Joubran summed up his remarks with a call for dialogue.
“Coexistence means trying to find ways to live together and enjoy it,” he said. “The key words are mutual respect and tolerance. If we implement them in the field, our situation would be much better. For this there’s a need to meet with one another, to remove obstacles and prejudices, both through joint schools and by meetings of the leaders.”
Joubran caused somewhat of a storm over two years ago when he was documented remaining silent during the singing of “Hatikva,” Israel’s national anthem, at the conclusion of a Supreme Court swearing-in ceremony.
Also this:
http://www.salon.com/2012/10/23/majority_of_israeli_jews_support_apartheid_regime_survey_finds/