No one can put it better for the masses than Juan Cole:
Netanyahu wants the Palestinians to acknowledge that Israel is a “Jewish state.” I don’t understand this demand. Israel is not a Jewish state, it is a multi-cultural state, with about half a million non-Jewish Russians and Ukrainians and 20% of its population is Arab. If “Jewish” is meant religiously, then observant Jews are actually a minority of the population in Israel. If “Jewish” is meant racially, then it is a particularly shameful demand. It is like demanding either that the US be recognized as a “Christian” country or as a “white” country. Obama was ill-advised to use the diction, himself.