For six years now, Kaadan has tried to move his family out of the run-down, overcrowded Arab town of Baqa to the greener pastures of Katzir, a small Jewish village built on state-owned land, where open spaces, whitewashed houses and impeccably paved streets form a picture of suburban bliss. But the Katzir municipal council has barred Kaadan from building a home there for a simple reason: He's an Arab.

Comprising roughly 18 percent of the country's population, Israeli Arabs like Kaadan pay taxes, vote in Israeli elections and speak Hebrew. Tired of being treated as a second-class citizen, Kaadan sued the state in 1995. On paper, he won. But in practice, Kaadan and many other Arabs are still waiting for Israel to uphold their basic human rights.

Israel has treated its Arab minority -- the descendants of the 150,000 Arabs who stayed put when Israel was established during the War of Independence in 1948 -- as the enemy within for decades, as a fifth column with links to the greater Arab world, bent on undermining the Jewish state. (Other Palestinians became refugees in the West Bank, Gaza and neighboring Arab countries.) Until 1966, Israeli Arabs were subjected to curfews, administrative detentions, land confiscations and employment restrictions under a military regime. Israel even required its Arabs to carry "movement licenses" whenever they left their villages. Recently, however, the idea that Arabs should be treated as equal citizens has begun to take root in Israeli society.

Indeed, small signs of positive change are everywhere. In 1998, Israelis appointed the first Arab justice to the Supreme Court. In 1999, for the first time in the contest's history, the country selected a long-lashed Arab beauty as Miss Israel. In March, the Supreme Court issued a landmark decision based on the Kaadan case, ruling that the government may not allocate state-owned land to communities like Katzir that bar Arab residents, and holding that "equality is among the fundamental principles of the state."

And last month, Israeli Prime Minister Ehud Barak announced a plan to spend $1 billion over the next four years to improve roads, schools, work opportunities and housing in the Arab sector. Barak had promised during his campaign last year to narrow the gap between Arabs and Jews. That pledge -- and Barak's eagerness to make peace with Israel's Arab neighbors -- won him the support of 95 percent of Israeli Arab voters and accounted for his landslide victory in the last election. But support for Barak has crumbled among Arabs in the past weeks, and the plan was greeted with skepticism from Israeli Arab politicians. "The Arab sector has been discriminated against for 52 years. We need a development program, but it's too little, too late," Aded Dahamshe, one of 12 Arab members of the Israeli parliament, said in a telephone interview.

The plan, drafted over the past year, was unveiled soon after the worst unrest in Israeli Arab history. In early October, Israeli Arabs let their pent-up anger against the Jewish state explode in demonstrations of support for the Palestinians who live in the West Bank and Gaza. The demonstrations quickly turned to riots pitting disgruntled Arab youths against Israeli police. Thirteen Israeli Arabs were killed by the police, and hundreds more were wounded.

In response to the recent riots, the Israeli army announced plans this week to fortify Jewish towns like Katzir that are near Arab population centers. The extra precautionary measures will include stockpiling weapons, radio communications systems, fences, electric gates and providing alternative access routes to ensure that Jewish populations will not be vulnerable to attacks from their Arab neighbors.

The riots and the heavy-handed police crackdown confirmed deep-seated fears on both sides. In a survey conducted Oct. 6 for an Israeli newspaper, 74 percent of the Israeli Jews polled said they considered the behavior of Israeli Arabs "treacherous." And 66 percent of Israeli Arabs said they would show allegiance to the Palestinians next door rather than to Israel in a conflict, adding substance to Israeli Jews' security concerns. At the same time, when police opened fire against Arab rioters armed with stones, Arabs became convinced that Israel will always treat them as disposable enemies rather than as valuable citizens.

"Israel doesn't realize it's forcing us to become more nationalistic, more Palestinian than we ever wanted to be," Kaadan says.

A 46-year-old staff nurse at an Israeli hospital and the father of four daughters, Kaadan considers himself a model citizen and a representative of "the moderate [Arab] stream that wants peace." He teaches his daughters how to use a computer at home and has hired a Russian Jewish music instructor to teach them piano. The girls' school in Baqa has neither a computer room nor music classes, and is lined with dangerous asbestos. One of the main reasons Kaadan would like to move to Katzir, the genteel Jewish village just a few miles from Baqa, is to improve his family's standard of living. After the Supreme Court ruled in his favor this spring, Kaadan declared, "We know today that [Israel] is a state of all its citizens. The meaning of this is enough discrimination, enough racism -- give coexistence a chance."

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