The proposed legislation sharpened debate over whether Israel could be both Jewish and democratic, with equal rights for its one million Arab citizens.

Israel Backs Off Bill to Curb Arab Home Buying
The Israeli cabinet, under fire from critics who accused it of supporting racist legislation, backed off today from its endorsement of a bill that would have barred Israeli Arabs from buying homes in communities built on state land.

The bill, submitted by Rabbi Haim Druckman, a lawmaker from the rightist National Religious Party, would require that state land allocated to build communities in Israel be used "for Jewish settlement only." More than 90 percent of the land in Israel is owned or controlled by the state.

The proposed legislation sharpened debate over whether Israel could be both Jewish and democratic, with equal rights for its one million Arab citizens.

The bill would have prevented Israeli Arabs from buying land allocated to the quasi-governmental Jewish Agency for building communities. It was meant to invalidate an Israeli Supreme Court ruling from March 2000 that there could be no discrimination between Jews and Arabs in allocation of state lands.

The ruling was made in response to a petition by an Israeli Arab, Adel Kaadan, who had been barred from buying a plot for a house in the Galilee community of Katzir, built by the Jewish Agency, on the ground that he was an Arab.

Foreign Minister Shimon Peres called the bill racist, as did Yossi Sarid, the leftist opposition leader. Attorney General Elyakim Rubinstein also criticized the bill and urged the cabinet not to endorse it.

After ministers from Likud and other rightist or religious parties voted for the bill in the cabinet last Sunday, the Labor Party, a major partner in the government coalition, announced that it would oppose the bill in Parliament.

Prime Minister Ariel Sharon, who initially expressed support for the bill in principle, told the cabinet today that legislation was not the best course of action given the bill's implications for Jewish-Arab relations in Israel, his spokesman said.
http://www.nytimes.com/2002/07/15/international/middleeast/15ISRA.html