While all the Arabs that are "inside" the Green Line are also... Israelis. Get it? It is their citizenship that determines this, and so all the Citizens of Israel (Jew and Arab alike) belong "inside" the GL, and all the Citizens of Palestine (Jew and Arab alike) belong "outside" the GL. Pretty simple, really.....
Gadhafi loyalists stage rare protest in eastern Libya (Reuters)
from the article: The end of the Israeli colony