Six years ago, Rabah Rizik quit his banking career to help reverse decades of public neglect toward Israel's 20 percent Arab minority.

His new job? Helping to implement a pioneering civil service program akin to AmeriCorps in the United States. The initiative gave Arab high school graduates – who are exempt from the draft faced by Jewish 18-year-olds – the opportunity to contribute to their state, just as most of their Jewish counterparts do through military service.

"It's win-win-win," says Mr. Rizik, the founder and director of the Arab-run Association for Civic Equality, the biggest subcontractor for the state-run program. "Our goal is that participants will be connected to the state. We are loyal citizens."

In return for one to two years of community work, Arabs get the same benefits as noncombat conscripts, including college stipends or business assistance. The goal is to help integrate Israeli Arabs, who have become increasingly disillusioned about achieving equality in a state that defines itself as both Jewish and democratic.

But in some respects, the state program has been lose-lose: Dozens of Arab opponents demonstrated outside Rizik's home in April, calling him a traitor and an Israeli collaborator. And this year, he couldn't get enough funding for new volunteer spots, undermining the program's credibility among hundreds of prospective participants who were turned away.

"It's as if the opponents from both communities are helping one another," he says.

Status of Arab citizens 'most sensitive' issue in Israel

The public has focused more on Israeli Arabs since they engaged in widespread rioting in parallel to the outbreak of the Palestinian intifada 10 years ago. In a 2003 report on clashes with police that left 12 Israeli Arabs and one Israeli Jew dead, an independent state commission called the status of Arab citizens "the most sensitive and important issue on the domestic Israeli agenda."

Israeli Arabs' higher birthrates and frustration with government policies that they see as discriminatory are testing Israel's aspiration to be both Jewish and democratic. But despite their status as central to both Israel's internal politics and its relations with the broader Arab world, relations have deteriorated in the past decade.

Foreign Minister Avigdor Lieberman's ultranationalist party Yisrael Beiteinu became the third largest in parliament last year, and has pushed laws questioning the loyalty of Arabs. Arab leaders, meanwhile, are arguing that Israel seeks to perpetuate the ethnic superiority of Jews by severing ties between its Arab minority and Palestinians.

"The situation is as explosive as it was 10 years ago and perhaps even more," says Elie Rekhess, a recognized authority on Israel's Arabs.

Modeled on program for Orthodox women

The civil service program is modeled on the "national service" program geared to Orthodox Jewish women uncomfortable with the army's coed work environment. But Arab organizers are careful to refer to it as "civic" service so as to play down links to Jewish nationalism.

Results have been mixed. Participation has doubled to 1,256 since its launch in 2008, sending recruits to work in Arab schools and hospitals. However, 90 percent of the volunteers are women. Rizik says the fact that hundreds of applicants were refused for lack of funds when the state underwrites the participation of nearly 10,000 Orthodox Jewish women is discriminatory. "Why do the religious deserve it more than us?" he asks.

Rizik, a Christian Arab, believes that participation can boost prospects for employment and reduce crime.

Why Arabs are opposed

But he is well aware of fierce Arab opposition: In his hometown of Nazareth, the mayor has banned the civil service program. Some Arab leaders see the project as Israel's government conditioning Arab equality on public service. Moreover, many are wary because the first civic service czar was the military's former chief psychologist. Some see the program as preparing the way for Arabs to volunteer in the Israeli military.

"The Arabs have a strategic decision since '48 that we oppose all activity against the security of Israel, but we oppose being part of the defense establishment," says Ayman Oudeh, who oversees a youth movement opposed to the civil service program. "When this [program] is connected to security, it disrupts the national identity of Palestinians."

Rawan, a female volunteer finishing her service at a senior citizens' center in Shfaram, takes a break after serving lunch to residents. (Rizik insists that her last name not be revealed for fear of a social boycott.)

But Rawan seems unfazed by the controversy surrounding the program and the fact that none of her friends sought to volunteer. "It didn't scare me. We're just helping people," she says. Rawan also volunteered at Israel's trade ministry, where she explained employment rights to Arab youths. "When you help society, you help the country."

Integration key to political and economic future

There's a growing realization that the country's political and economic future depends on integrating the Arab minority. Underemployment makes them an untapped resource of productivity.

"If we don't give the appropriate investment to the Arabs, we will turn them into our adversary," says Avishai Braverman, Israel's minister for minority affairs and a former economist at the World Bank who says he is trying to secure more funds for the civil service program. "The Arab sector has tremendous potential ... because it is an engine of economic growth."

While 60 percent of Jewish high-schoolers pass standardized eligibility tests for college, only 40 percent of Israeli Arabs do.Rizik sees his civil service program, which could provide a crucial bridge for young Arabs who don't immediately gain admission to college, as capable of reducing the risk of another violent outbreak.

"October 2000 was a small spark that became huge because Arab youths had nothing to do," he says. "A person who completes a volunteer program thinks differently than someone who goes to work. This is a step that helps you understand the other."