This is the legacy of a country that never denazified, but still falls in line with Western hegemony regarding the imperialist project of Israel. They have found a new victim to foist their racist paranoia unto and simultaneously use the widespread opposition among Muslims and Arabs to Israel (a state that ethnically cleanses and exterminates them) as means to justify their extermination because their opposition to the Israel is systemically and legally classified as antisemitic.
This is the obvious consequence of labeling valid criticism of Israel as rote antisemitism is fueling anti-Muslim villainization and hysteria. If you oppose Arab extermination and ethnic cleansing, you are antisemitic. And if you're antisemitic you deserve extermination.
I think honestly what happened is that after the state was formed you see the creation of a national bourgeoisie who have an obvious material motivation for continual expansion and disenfranchisement of the other local population. It is pretty much you standard internal primitive accumulation creating the base for capitalist development.