This is a case of whether private developers can discriminate against particular groups when selling units in a building. In the U.S., we have anti-discrimination laws that require equal opportunity sales from developers, though I don't think the rules apply to someone just selling his house. I guess Israel doesn't have rules requiring private developers not to discriminate in sales. This doesn't seem to be a case of the developer putting in a "no selling to Arabs" covenant in the deeds, just that he intends the initial sales to be to Jews only. So I guess that means an Arab can buy from one of the original owners.
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from the article: Supreme Court okays Jewish-only buildings in Jaffa