Israelis are a multi-racial people that are either so by religion, or ethnic background, that live in the modern nation of Israel. Ancient Israel was a nation the Romans destroyed in 70 AD. There never has been a nation called Palestine. There have always been Asiatic Jews living in the Middle East. Not all Israelis are descended from European Jews, although Israel was recreated after the Holocaust of WW2, for Jewish people that lived around the world, in many nations. The turmoil between Arabs and Israelis goes all the way back to Isaac and Ishmael, half brothers that the Arabs and Jews descended from. Sibbling rivalry at it's worst.
Israelis and Arabs are both Semitic.