Those Arabs who didn't leave after the partition were granted citizenship as proof that Israel is commited to being a true democracy, with equal rights for all, etc. But they've had a kind of 2nd class status within Israel, widely discriminated against.
Netanyahu has recently used Israeli Arabs to motivate voters on the right, claiming they are pushing to undermine Israel. "Bibi vs Tibi" was the motto, and the good natured Arab Israeli "Tibi" - a long time politician - claimed "I'm not running for Prime Minister, but I guess I am!".
https://www.timesofisrael.com/facing...in-on-arab-mk/
Also during the campaign, Netanyahu declared "Israel is a state of Jewish people alone"
https://www.foxnews.com/world/netany...h-people-alone, pointing to a measure passed last year that affirmed that Israel is a Jewish State.
This is the situation the NBR divesture movement points to in claiming an Apartheid situation of tiering exists: Israeli Jews + Jewish settlers in the occupied territories, Israeli Arabs who are citizens, and then Arabs in the occupied territories.
Long term, Netanyahu seems to seek a purified one-state solution, getting the fast-growing Palestinians moved in with neighboring Arab nations.