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MrBubbles said:

israeli arabs have equal rights (and thats more rights than they would get in any other arab country)

On paper means nothing when the government itself has extreme prejudice against arabs. They don't give enough support to arab settlements in Israel, among others things.

As a side note, Israeli Jews are extremely racist to Arabs:

In 2006, a research institute poll reported that 41% of Israelis were in favour of Arab-Israeli segregation, 40% believed "the state needs to support the emigration of Arab citizens", and 63% believed Arabs to be a "security and demographic threat" to Israel. The data went on to report more than two thirds would not want to live in the same building as an Arab, 36% believed Arab culture to be inferior, and 18% felt hatred when they heard Arabic spoken.

In 2007, the Association for Civil Rights in Israel released a report stating that the expression of anti-Arab views had doubled, and anti-Arab racist incidents had increased by 26%. The report quoted polls that suggested 50% of Jewish Israelis do not believe Arab citizens of Israel should have equal rights, 50% said they wanted the government to encourage Arab emigration from Israel, and 75% of Jewish youths said Arabs were less intelligent and less clean than Jews.

http://www.guardian.co.uk/world/2006/mar/24/israel

http://news.bbc.co.uk/2/hi/middle_east/7136068.stm