JERUSALEM (Reuters) - Israel passed a “nation-state” law on Thursday declaring that only Jews have the right of self-determination in the country, stirring anger from members of the Arab minority who said it was racist and drawing an expression of concern from the EU.

The bill, backed by the right-wing government, passed through parliament after months of political argument and some Arab lawmakers shouted and ripped up their papers after the vote.

“This is a defining moment in the annals of Zionism and the history of the state of Israel,” Prime Minister Benjamin Netanyahu told the Knesset.

Largely symbolic, the law was enacted just after the 70th anniversary of the birth of the state of Israel. It stipulates “Israel is the historical homeland of the Jewish people and they have an exclusive right to national self-determination in it”.

Palestinian leaders condemned the move. “No racist law will undermine the rights of our people. We are proud of being a strong nation deeply rooted in our homeland,” Palestinian chief negotiator Saeb Erekat said in a statement.

In Brussels, a spokeswoman for EU foreign affairs chief Federica Mogherini expressed concern at the move and said it would complicate a two-state solution to the Israel-Palestinian conflict.

The bill also removes Arabic as an official language alongside Hebrew, downgrading it to a “special status” that enables its continued use in Israeli institutions.

Israel’s Arab citizens number some 1.8 million, about 20 percent of the 9 million population.

“I announce with shock and sorrow the death of democracy,” Ahmed Tibi, an Arab lawmaker, told reporters after the law was adopted.

Slideshow ( 4 images )

Early drafts had gone further in what critics at home and abroad saw as discrimination toward Arabs, who have long said they are treated in Israel as second-class citizens.

Clauses that were dropped after political wrangling would have enshrined in law establishment of Jewish-only communities.

Slideshow ( 4 images )

A more vaguely-worded final version said: “The state views the development of Jewish settlement as a national value and will act to encourage and promote its establishment.”

Even after the changes, critics said the new law will deepen a sense of alienation within the Arab minority.

It comprises mainly descendants of Palestinians who remained on their land during the conflict between Arabs and Jews that culminated in the war of 1948 surrounding Israel’s creation. Hundreds of thousands were forced to leave their homes or fled.

Those who stayed have equal rights under law but say they face constant discrimination, citing inferior services and unfair allocations for education, health and housing.

“This is racist legislation by a radical right-wing government that is creating radical laws, and is planting the seeds to create an apartheid state,” said physician Bassam Bisharah, 71, a resident of Ma’alot Tarshiha, a municipality in northern Israel created by linking a Jewish and an Arab town.

(GRAPHIC: Israeli population - tmsnrt.rs/2L1pzkt)