The adjective 'Israeli' is a magician's trick. but whereas the common magician makes coins and pigeons vanish and reappear, 'Israeli' can disappear a whole people, only to pull it back from the ear of an assistant when the show requires it. Let's see how it's done.
Technically and legally, the adjective 'Israeli' refers to all citizens of the state. Palestinians of 48, the land's indigenous people, are thus technically 'Israelis.' Indeed many in Israel call them 'Arab-Israeli,' with the convenience of eliminating Palestine a side benefit. One would expect however that, logically and linguistically at least, an Arab-Israeli is an Israeli, just like one would say that a tea cup is necessarily a cup. Surprise! When the adjective is used in normal discourse, 'Israeli' refers to the Jewish citizens of Israel alone. 'Israeli' public opinion in what Jews in Israel think. Israeli history is the history of establishing a Jewish state in Palestine. Israeli culture is Amos Oz and Marcel Ianco. It is not Mahmoud Darwish. Israeli economy, as Netanyahu recently quipped, insightfully, does quite well if you just don't count those who don't count. etc. etc.
Palestinians with Israeli citizenship have basically two possible responses that are both embedded in the adjective. They can accept it or reject it. Whichever they choose, they are like the audience member who is invited on stage to 'participate' in the magician's show; the choices are scripted into the performance. If they want to adopt the adjective, recognizing that it includes them, they soon discover that they have adopted the adjective in the second sense, as one that excludes them, thus recognizing and affirming their own erasure and Jewish domination over them in return for dubious and illusory "fitting in." If however they reject it, it turns out that what they reject is the adjective in the first sense. Namely, they reject the democratic state, the will of the majority, their (second class) civil rights, etc. And thus they become grist to the Israeli propaganda mill ('the Arabs understand only force,' etc.) and trigger the famous mechanisms by which as everybody knows "democracy defends itself against those who abuse its democratic means to try to destroy it." la-di-da, la-di-da.
The video below, on an Al-Jazeera show, and if you watch the whole episode, (you will probably wince a lot), you will see the magician at work, and also the incredible racism that Palestinian must contend with regularly. You will also see Stav Shafir, a leader of the #J14 protest movement from a year ago, discovering her inner career politician (she is now running to parliament on the most wretched party ticket in Israel, the labor party). Here you can see her mastering the Obamish art of platitudes, 'change' and 'yes we can' and a few others, all in the Israeli inflection. I find her viscerally repellant; but your mileage may vary. My prediction, in a few years she will be under investigation for corruption.
Bonus, the remarkable presence, trapped as she is by the magician's tricks, of Hanin Zoabi. Shlomo Sand also acquits himself decently, to some extend by a few of the things he says and to an even greater extent by the feeling that he is just short of rupturing a vein.