There is no such thing as an Israeli territorial nation, because in Eastern Europe (and Israel's founding fathers came from Eastern Europe), a nation is not a community of citizens but rather a cultural community. Westerners reject this conception of nationhood because a cultural nation does not encompass all the citizens of a state. However, a nation that defines its national identity on territorial (civic) basis cannot recognize national minorities since all the citizens of the state are required to be part of the same nation. This is why Catalans, Basques, Corsians, Kurds and Quebecers are recognized merely as cultural minorites, but not as nations. Transposing the Western system in Israel would mean that Israeli Arabs would be forced to become part of a territorial Israeli nation and they would no longer be recognized as a national minority. Thus, it is much better for Israel to maintain this distinction between nationality and citizenship. It is the only way for Israeli Arabs to be equal citizens without being forced to abandon their national identity.
Donald Trump: Israeli settlement construction in West Bank should 'keep going' (Haaretz)