Ah yes…completely shifting the onus onto the Palestinians, and refusing to accept any responsibility! What a ridiculously facile analysis of the situation.
When has such a solution been offered? So far, Israel has disingeuously claimed to offer a “Palestinian state” while only putting forward a network of small, semi-autonomous, Bantustans, fractionated by Israeli territory (which, one can safely assume on past track records, will be full of road blocks and security checkpoints to ensure that Palestinians can’t move freely even within their supposed “state”). Several Palestinian leaders (including elements within the Hamas leadership) have indicated that they will accept the existance of an Israeli state, provided they are offered an independent state following the '67 borders. If you had any interest in impartiality (and its becoming increasingly clear that you don’t), you might have bothered pointing out that there is also resistance on Israel’s part to ceeding sufficient land to create a territorially contiguous Palestinian state. But it’s far easier to just blame everything on “the Arabs” isn’t it?
Official recognition of a particular religious/ethnic group over others paves the way for entrenched discriminatory policies. Jewish states are no exception.
When they have been used to denaturalize hundreds of thousands of people who were forcibly expelled from their homes in contravention of international law, they pretty clearly do. Moreover, claiming that are not an indication of the preferred status accorded to Jews in Israel is nothing short of complete intellectual dishonesty.
As I already pointed out, the fact remains that the JNF, which functions as a de facto government organization and has been given/sold 15% of the total land by the national government, openly declares that it does not lease any of its land to Israeli Gentiles. This is open, unambiguous, unabashed discrimination - the fact that you fail to see it as such is testament to the level at which such discrimination has been entrenched in the national psyche.
Or, rather, it creates formal settlements where most of the non-Jewish population is obliged to live. Yes, in a throw back to 16th century Europe, the Israeli government has more or less created Palestininan ghettos. Again, its ironic to see people with such an immense history of persecution, when given the opporutinity, so willingly taking up the role of the oppressor.
Baseless conjecture aside, your original statement was actually that “…all Israeli citizens, including the Arabs, enjoy the same civil and democratic rights with all the benefits of citizenship.” Which I have pretty effectively demonstrated to be patently false.