UMM EL-FAHM, Israel, 5 February 2004 — Israeli Arabs, who have long complained of discrimination, were worrying yesterday about suggestions Israel may one day swap them for Jewish settlers in a deal with the Palestinians.

Talk was of little else at the grocery stores in the Israeli Arab town of Umm El-Fahm as people gathered to read newspaper reports of an idea floated by Prime Minister Ariel Sharon’s government.

“We are equal residents. We want to stay here,” said Jabali Khaled Yousef. “We built this country.”

Israel’s relationship with the nearly 20 percent of its citizens who are Arabs — many of whom have Palestinian relatives — has grown increasingly strained during three years of conflict with the Palestinians.

Officials in the Jewish state say they are concerned that a high Arab birthrate could shift the demographic balance.

A spokesman for Sharon said that Israel was studying the idea of redrawing borders with a future Palestinian entity so that Israeli Arab towns would fall inside Palestinian-ruled areas.

In return and “in order to establish a demographic balance”, Israel would annex clusters of Jewish communities in the West Bank, land it occupied in the 1967 Middle East War and which Palestinians want for a state.

Palestinians dismissed the idea of a land swap as a publicity stunt.

But Israel’s Arabs are not taking it lightly.

“What is serious about this is that Sharon continues to draw a question mark about the status of the Arabs in this country,” said Israeli Arab lawmaker Azmi Bishara.

The Arab minority in the country of six million has long complained about discrimination, especially in the allotment of state funds for housing and education. Arabs in Israel are still financially better off than they might be in the West Bank, where per capita gross domestic product is by some estimates less than one twentieth of Israel’s.

Tension between Israel’s Jews and Arabs soared at the start of the Palestinian uprising in October 2000, especially after police shot and killed 12 Israeli Arabs demonstrating in solidarity with the Palestinians. Since then, Israeli Arabs have largely stayed on the sidelines of the conflict.