Coming out of a movie last month in one of those edge-of-town malls that disfigure Israeli conurbations, I ran into a conga line of men, women and children shuffling their way into a McDonald’s. The men wore T-shirts and jeans, the women flowery headscarves and varied outfits. Several danced along in silly conical hats. It was someone’s birthday, by the look of it.

It took a second look to realise that the celebrants were a family of Israeli Arabs, descendants of the stubborn minority — some 150,000 Christians and Muslims — who refused to join the 750,000-strong Palestinian exodus in 1948. Today, by census, there are 1.6 million Israeli Arabs, some 20 per cent of the population. They enjoy full civic rights and a high level of prosperity. Beside the refugees, their lifestyle appears lavish.

As I drove through the Arab heartlands in Galilee, a hilly straggle of houses that I remember being blacked out at night for want of connection to the national grid has boomed into a noisy town with three-storey houses and an exclusive dealership in a European make of car much favoured by ultra-orthodox Jews.

Bars and restaurants on the Tel Aviv seafront are dotted with Arabs from Jaffa. On Friday night, the common day of rest, there are as many Israeli Arabs strolling along the promenade as there are Israeli Jews. When I remark on the phenomenon, young Israelis shrug as if my observation is too obvious to be worth mentioning. Integration has become a fact of life. Yet 25 years ago, Israeli Arabs were inconspicuous in Jewish towns and 45 years ago, as far as my memory extends, they were invisible.

In the first two decades of the state of Israel, until the Six Day War, Arab citizens were penned into pales of settlement, nervously watched by the security services. In the next two decades, they formed a no-man’s-land between the Israeli state and the occupied Palestinians on the West Bank and Gaza Strip, their resentful cousins. Torn between kinship and comfort, Israeli Arabs opted on the whole to put head over heart.

Over the past 25 years, normalisation has set in. Learning Hebrew at school as an obligatory second language, Israeli Arabs have made careers in most parts of the economy and in academic life. One of the most popular comedy series on commercial Israeli television is entitled Arab Labour. It makes merry with the tensions raised by a middle-class Arab family who move into an urban Israeli apartment block. In the episodes I have seen, Israeli Jews come off worst in the clash of cultures. One of the Arab actors, Mira Awad, has represented Israel at the Eurovision Song Contest. What could be more normal?

That is not to pretend that all is rosy. Israeli Arabs are subject to stringent airport and roadside security checks. Some complain of being treated as second-class citizens. A Jaffa driver told me his town had become overpriced and young men could not afford to buy a home. Economic progress and social participation, however, are positive indicators of how the country and the region might function if and when a peace agreement is reached. The Israeli Arabs serve, in this respect, as role models for a postwar utopia.

They also refute hostile clichés. The novelist Linda Grant drew attention in the Independent in March to a book by a French academic, Diana Pinto, arguing that Israel is functionally autistic-high-tech and tunnel-visioned, unable to see “the Other”. The vastly increased visibility of Israeli Arabs gives the lie to that theory.

It also confounds the perpetual accusation that Israel is somehow an “apartheid state”. If Israel were indeed a society founded on racial supremacy and separation, there would be no Arabs celebrating birthdays in shopping malls, no strollers on the Tel Aviv prom, no automobile millionaires in Galilee and no property boom in Jaffa. The apartheid libel, a propaganda ploy of the pro-Palestine lobby and the anti-Zionist Left, denies the blatant reality that Israel is a fast-evolving, multicultural society with more tolerance for minorities than any of its neighbours (and most European states). The casual confidence of its Arab citizens is testimony to a healthy society.