Palestinian Arabs form the largest ethnic minority in Israel. Notions of identity among Israel's Arab citizens are complex, encompassing civic, religious, and ethnic components. In 1948, the Israeli government conferred Israeli citizenship upon all Arabs living in Israel. ​​ According to the Israel Central Bureau of Statistics, the Israeli Arab population stood at 21% of Israel's total population. They mostly live in Arab-majority towns and cities.

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The Ottoman Empire and the British Mandate ruled over the Arab population before 1948. They inhabited a network of urban centers like Jaffa, Haifa, and Nazareth, as well as hundreds of rural agricultural villages and Bedouin encampments dispersed throughout the Negev and Galilee deserts. The 1947 United Nations Partition Plan and the ensuing 1948 Arab-Israeli War saw 700,000 Arabs flee or be expelled from their homes; a minority of approximately 156,000 remained within the established borders of the State of Israel. The community was granted formal Israeli citizenship and the right to vote in national elections from the state's inception, allowing them to elect Arab representatives to the Knesset, Israel's parliament, where they utilized the legislative arena to advocate for civil rights and municipal funding.

The Arab community in Israel, which is made up primarily of Sunni Muslims with significant Christian and Druze minorities, has attained unprecedented levels of professional and educational advancement in the twenty-first century. As evidenced by Arab judges on the Israeli Supreme Court, they have become highly visible pillars in Israel's medical system, pharmacies, high-tech industries, and judicial branches.

The community still faces serious internal issues like a sharp increase in organized crime and violence within Arab towns, as well as ongoing civic debates about municipal budgets, land planning, and laws, despite this socioeconomic mobilization and historic political milestones, such as the United Arab List breaking taboos by joining a governing Israeli coalition in 2021.

The Druze and the Bedouin in the Negev and the Galilee have historically expressed the strongest affinity to Israel and are likely to identify as Israelis. They speak Hebrew and Arabic, and their traditional languages are primarily Levantine Arabic dialects, such as Lebanese Arabic further north, especially among the Druze, and Palestinian Arabic in central Israel. Conversely, a dialect of Northwest Arabian is spoken by Negev Bedouins. It is frequently referred to as the Israeli Arabic dialect since many Hebrew loanwords and phrases have been incorporated into the modern Arabic dialects spoken by Arabs in Israel. The majority of Arab Israelis identify as Muslims, but there are also sizable Christian and Druze minorities.