The issue of the Israeli law preventing Israeli citizens from marrying Palestinians is a very painful, difficult issue for me, about which I feel too conflicted to state my own opinion. I'd rather present the Israeli perspective on the issue and to analyze the overwhelming support among Jewish Israelis for the law.
The notion of "demographic control" sounds very ugly to people like us who have internalized liberal North American values. The fact is that in Israel, demography and security are conceived of as being almost inseparable. Many people would tell you straight out that they see an increase in the Arab population as a threat to their security and the survival of Israel as a Jewish state. That sentiment is of course linked to the fact that Jewish Israelis are intensely aware of the fact that they are a tiny minority in the larger Middle East. In Israel, even people who are generally quite liberal in their view of Israeli Arabs are frightened by the close ties between Arabs in Israel (quite a few of whom identify themselves as Palestinians) and Palestinians in the West Bank or Gaza. I used to tell people that only a minority of Israeli Arabs have been involved in terrorist attacks, but that's not very satisfying to the average Jewish Israeli. They'll ask you explicitly: why shouldn't we do everything we can to prevent an increase even in that minority?
Can one argue with that kind of logic? I think that one cannot deny that marriages between Arabs/Palestinians in Israel or "Israeli Arabs" (there are so many identities that people embrace, one, two or three at a time) are an important factor (not the only one) behind Arabs' identification with the Palestinians. How much harder is it for a child born to a Palestinian mother (and usually, it is Arab Israeli men who marry Palestinian wives) to relate in a positive way to the state of Israel and to Israeli Jewish society? A whole bunch of the kids that I teach have Palestinian mothers. I remember two sisters who always wore bead bracelets with the Palestinian flag. I never did a survey of their attitudes to Israel compared to those of other kids, but there's no doubt in my mind that that family ties can cause a very conflicted identity - it's certainly not a recipe for loyalty. Can you fault the majority of Israelis who support the law for being afraid? I won't deny that racism isn't part of the equation, but you'll find support for the law even among left-wingers who are quite outspoken in their defence of Arabs in Israel.
There's also an economic fear: there's the belief that more and more Palestinians will flood into Israel as the economic situation in the West Bank and Gaza Strip deteriorates further. So, in the same way that certain European states have slapped restrictions on their citizenship laws, Israelis see nothing wrong with the new law. The old law extending citizenship to Palestinian spouses has come to be seen as a springboard that will allow entire extended families from the West Bank or Gaza to join their relatives in Israel. Throughout the 1990s, many many Palestinians got either citizenship or permanent resident status through marriage and family ties. I have a good friend who is from Hebron and grew up there, but moved to Israel once he graduated from university about three or four years. He was able to do so because his mother was a resident of East Jerusalem and is therefore a permanent resident. Up until the second intifada, people like my friend would have stayed in their hometowns, but now, because of the economic collapse in the Palestinian territories, the greater economic opportunities in Israel and the comparatively generous social welfare system and the relatively good public health care system have become huge draws for Palestinians. My friend, btw, is a great person, a productive member of society who works as a badly needed English teacher at a high school in the Bedouin sector. But can you expect someone like him to become a loyal citizen who identifies with the state of Israel? Will his children, in whom, I have no doubt, he will instill the moral values by which he lives, grow up to feel anything but alienation vis-a-vis the Israeli state?
Finally, there is one interesting observation that I'd like to share about the impact of this law in the Negev, among the Bedouin. Many many Bedouin men have married Palestinian women (usually from the Gaza Strip) in the past. One of the reasons has been purely economical. In Arab society, a groom pays a "mahr" (Hebrew: moher) or "bride price" to the bride. That money is supposed to go to the bride as a kind of insurance policy in case of divorce or whatever, but the bride's family usually takes part or even most of it. In any case, because of the assymetry in the economic situation in the Gaza Strip and Israel, Palestinian brides are usually "cheaper" than Bedouin brides, unless the marriage is between cousins, in which case the family members charge lower "prices." In the Negev, the "availability" of Palestinian brides was a factor that enabled polygamy in many cases. Taking a second wife was made more economically feasible. Often, these brides were taken at a very young age, too. Maybe the new law will reduce the incidence of polygamy, or perhaps it will further increase cousin marriage among the more traditional segments of Bedouin society. But maybe young people will in any case begin to abandon polygamy.