As long as Muslim-only areas are legal, Jewish-only areas are too. It is a complex issue. These groups are officially and unofficially at war. Islamic jihad, PLO charter, Syria formally at war with Israel, and so on. Jews are forced to respond to the existential and demographic threat. In an ideal world, small 'covenant communities' can be a good thing. One town can be just for artists, another for some secular social experiment, another for an immersive Islamic sharia lifestyle, another for an immersive Jewish halakhic lifestyle, another for a Christian progressives, or any subculture. As long as they never use coercion, nor become isolationist, these charters can preserve the diversity of humanity.
Libya rival government calls for regional conference to tackle migrant influx (Reuters)
from the article: Supreme Court backs Jews-only housing in Jaffa neighborhood