Israel has a constitutional problem that prevents proper external relationship with Arabs. The problem is that Israel has constitutional racism and its bylaws discriminate against non-Jews in many ways. For proper Justice and Liberalism this constitutional racism needs to be eliminated. Otherwise, Arabs have a legitimacy to think Israel is their enemy, as it is clearly and constitutionally discriminates against them.
The most important discrimination is in the immigration laws. At the moment, Jews can get automatic citizenship, while becoming an Israeli citizen for non-Jews is much more complicated. This has to be changed into one unified law for both Jews and non-Jews. The best option would be to allow anyone to enter Israel, and to work there, while giving citizenship to a person regardless of his religion or nationality after he or she has proved that he's worthy of it.
At the moment, there are only religious marriages, divorces, adoptions, etc. in Israel. This completely disallows Jews marrying non-Jews and other such anomalies. To resolve this problem, Israel must establish civil marriages, divorces and adoptions and other marital law.
Arabs are at the moment exempted for army service, while Jews are obliged to serve there. To solve it either the army should be mandatory for everybody, or voluntary for everybody. The best solution is to eliminate the draft completely and enact a voluntary service.
At the moment, there is also a discrimination in government funding between Israeli Arabs and Jews. This must be resolved.
It should be noted that Israel is the land of the Israeli and not the land of the Jew. Eliminating such factors, may not completely eliminate the anti-Israeli sentiments that many Arabs have, but it will certainly help. At the moment, there's a lot of evidence that serves as the basis for such sentiments.