Why is Israel surprized? Coexistence had failed , not due to Arab disengagement but because of persistent segregationist policy of Israel that discriminates aginst Arab communities from the moment Israel was created. Arabs feel that the "state" is imposed on them.The state declares that it is a jewish state and not the state for all its citizens. Look at every Arab center in Israel and you will find unemployment , decaying infrstructure , minimum services etc. There is empirical data that shows discriminatory public funding of Arab communities. I am not surprized that even Druze towns , who share the same fate , suffer from the same very issues. Druze communities even serve in the IGF and yet are discriminated against.
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from the article: Israeli mayor calls on State to declare Arab city 'hostile to Israel'