The "anti semite" fears are an American thing; outside of America, nobody cares. And that's to be expected... Israel gets no help from anyone else, so why should she care what they think? America, however, is a mind to be guarded, to ensure that her protection remains in the future. And this is a perfectly reasonable tactical stance to take for someone in Israel's precarious position.
Obviously it's not so simple as this in reality. You have idealists and zealots and hardliners all jockeying for control within any given government. But the primary driving force is that of state security.
The relationship between Israel and its Arab minority is much more nuanced than you think. I’d call it passive aggressive, going both ways.
Does that include the Palestinians, do the Israeli government counts them as people?
The 20% I referred to are Israeli-Arabs.
Why should that be considered?
Because it’s been historically progressive in its relationship towards minorities.
Because it’s not like it’s persecuting a tiny group of the population for sport, it’s that there’s a lot of tugging between a minority and majority which are much further apart in culture, religion and traditions than the whites and blacks in America.
Because it’s reasonable to expect that issues appearing in the American societal fabric such as discrimination would show just as much in Israel with its huge proportional minority share.
It’s not that Israel is racist as much as it is that there are discrimination issues in societies everywhere and this is just another instance.
Israel appears to be democratic but discriminates heavily and are also driven to a great extent by extremist hardliners and outright corruption (ie Netanyahu's numbers are down, so he wants to annex more of the West Bank). Also, you’re not supposed to criticize anything they do out of fear of being labeled an anti Semite.