It sounds like a bad joke, but it really happened: A rabbi went from Israel to Peru, converted a group of Native Americans to Judaism, brought them to this country and put them in a settlement, on land taken away from its Palestinian owners. There they receive, as all settlers do, generous government subsidies, paid for with money taken away from thousands of Israelis living below the poverty line. There they can live happily ever after (unless they leave the settlement in an unarmored car, in which case they may be ambushed by the original Palestinian owners.)

What causes a state to bring total strangers from another hemisphere in order to displace the native people, who gave lived there for many centuries, at the price of an eternal bloody conflict? The answer touches the foundations of Israel.

Since the founding of the state, its emissaries have been searching for "Jews". In the former Soviet Union, Jews were discovered either by finding Christians with remote Jewish family connections (the "Jewish grandmother") or by simply forging documents. Nobody knows how many non-Jews were thus brought to Israel by the Jewish Agency and other organizations - at least 200 thousand, perhaps 400 thousand. According to the laws of Israel, they were automatically accorded citizenship.

A few days ago, the "National Demographic Council" was revived, after being condemned to inactivity for some years. This is an institution that is supposed to deal with what many Israelis consider the state's most important problem - more important than the war with the Palestinians, Saddam's weapons of annihilation, growing unemployment and the economic crisis.

The "demographic problem" is being pondered in universities, talked about in the media, expounded by politicians and commentators.

"Experts" with computers are calculating what will be the percentage of Jews in Israel in 10, 25, 50 or a hundred years time. Will they be less than 78%? Or - God forbid! - only 75%? Will the womb of the orthodox Jewish woman, in addition to expected immigration, balance the production of the Arab uterus?

And if not, what can be done? Some propose encouraging Jewish births while resolutely discouraging Arab natural increase. Some suggest preventing Jewish immigrants from Russia from bringing with them Christian family members (allowed by the Law of Return in its present form.) Some demand the immediate expulsion of all foreign workers, before they settle down and establish families. Some pray for a wave of anti-Semitism in France or Argentina (but definitely not in the United States), that will push multitudes of Jews towards Israel. Many, including members of Sharon's government, support the simplest solution: driving all Arabs out of the country. The "new historian", Benny Morris, recently hinted that Ben-Gurion should have done this in 1948.

The attitude of the state to it Arab citizens, who now number 19% of the population, reminds one of Pharaoh, who - according to the Bible - told his people how to deal with another national minority: "Come on, let us deal wisely with them, lest they multiply." And of the method employed: "They made their lives bitter." (Exodus, 1)

According to the official definition, Israel is a "Jewish Democratic State". This was enshrined in law and endorsed by the Supreme Court. In theory, there is no contradiction between the two adjectives: The state is Jewish, but democracy safeguards equality for non-Jews, too. Or, alternatively, the state is democratic, but safeguards its Jewish character.

In reality, this is not a "Jewish democratic state" but a "Jewish demographic state". Demography overcomes democracy in all fields of action. An Arab citizen feels at every turn, since childhood, that he has no part in the state, that he is, at most, a tolerated resident. In every government office, police station or place of work, even in the Knesset, he is treated differently from a Jew, even in times of quiet. True, apart from the Law of Return, which gives a "Jew" and his family (but not to Arab refugees) the absolute right to come to Israel, no law discriminates between a "Jew" and a non-Jew. But this is only make-believe: numerous laws accord special privileges to persons "to whom the Law of Return applies", without mentioning "Jews" specifically.

This is so self evident, that all state officials act accordingly without even being aware of it. The "Israel Land Authority" distributes land to Jews, not to Arabs. All state development projects include Jews only. Among the hundreds of new towns and villages set up since the founding of Israel, not a single one was established for Arabs. There is no Arab minister in the Government, no Arab judge on the Supreme Court bench.

Usually, all these omissions are explained away by the ongoing Israeli-Palestinian conflict. After all, Israel's Arab citizens are Palestinians, too. But the question is what causes what: does the conflict create the anti-Arab attitude or does the anti-Arab attitude prolong the conflict?

Critics of Israel accuse it of practicing "Apartheid", the South African racist doctrine. This analogy may be partly misleading. Unlike Apartheid, Zionism is not based on race, but on a mixture of ghetto mentality and 19 th century European nationalism.

Ghetto mentality is the spirit of a persecuted, isolated community, which saw the whole world as divided between Jews and Goyim (gentiles). European nationalism strove for a homogeneous national-ethnic state. The Jewish demographic state has absorbed both these elements: a homogeneous Jewish national-ethnic state, with as few non-Jews as possible.

In Europe, where classical nationalism was born, it is giving way to the modern American outlook, which considers that every holder of a US passport belongs to the American nation, irrespective of race and ethnic origin. This has helped it becoming the most powerful state in the world, culturally, economically, and militarily. European nation-states are gradually ceding sovereignty to the European Union, and their citizenship is accorded to foreign immigrants, too, who contribute to their economy and safeguard their social welfare system. In Germany, children of immigrants born in the country receive citizenship, Britain and France are even more liberal.

Israel is faced with a historical choice: to go back to being a Jewish ghetto, with demographic anxieties and state trappings, or to go forwards towards a new national outlook, on the American-European model.

Zionism was the last European national movement. Israeli colonialism, too, has come 200 years too late. So it is perhaps natural that the challenge of adopting a new national outlook comes rather late. But in the end, I hope, the Jewish Demographic State will be replaced by the Israeli Democratic Republic, for the welfare and security of its citizens.