I really don't think there is a single Israeli who is not at least a little bit racist. The problem is the country is tiny and we got lots of different groups - arab, secular jew, religious jew, russian, french, anglo, illegals etc. Each group have their own cultures and because of the size of the country and even more the fact most people live in the centre and coastal areas then your just going to have culture clashes. I personally cannot stand russians and of course most jews also hate arabs for obvious reasons. Israel has a racism problem because of there being to many cultures in to small an area.
Ya'alon okays administrative detention of Jewish extremist suspected in church arson (Haaretz)
from the article: Sayed Kashua: Racist, but polite