"What I want to know is...
How is it that someone ( who happens to be an Arab ), whose parents and generations before them, who fled Haifa in a war situation, have less right to live in Haifa then some American or Russia ( who happens to be Jewish ),and whose only claimed connection is that thousands of years ago some people of vaguely similar ethnicity lived around there ?" asks Katie.
Katie, the answer is nationhood as it's commonly known is built among people with common cultural norms, religion, language, political and economic ideas, etc. As a US citizen, I have less right to become a Canadian citizen than an Australian immigrant. Why? Because we revolted against British rule over 200 years ago and are not in the Commonwealth.
Ireland gives preferential treatment to those of Irish background. Bulgaria gives ethnic Bulgarians an edge. Russian and America Jews certainly have more in common with Israeli Jews than with Arabs. This isn't so amazing.