Ideally, what should matter for the giving of the Israel prizes is merit, and merit alone. This is undoubtedly not always the case , but to different degrees in different areas of endeavor. My sense is that in the 'hard sciences' it is probably easier to come to a consensus judgment of most deserving of the Prize, rather than for instance in areas of Humanities. But that is a general rule and may not be the case in lots of cases. In any case I have no doubt that there are 'cliques' in various areas, and that deserving people often do not get prizes they deserve. Study the Nobel list in Literature with its mixture of mediocrities and great ones, and then consider too the great ones left off it. (Kafka, Joyce, Proust, Borges won no Nobel Prize). In short it may well be that there are many 'wrong'( if you will 'scandalous') choices but this has less to do with 'ethnicity' than with 'favoritism' of a more general kind.
4.2-scale earthquake felt in Dead Sea, Jerusalem area (Haaretz)
from the article: Black Box / The Israel Prize scandal