You are right to be skeptical, misrepresentations, distortions and omissions are common in the Zionist/pro-Israel narrative
I think you are right to be skeptical about some of Jared Israel's claims. Jared Israel misrepresents the history, which is not uncommon among pro-Israel propagandists going back to the beginning of the Zionist agenda. For example, the fraudulent Zionist slogan “land without a people, waiting for a people without a land*” was an over the top lie pushed to justify their racist scheme, it was a lie claiming there were no people in Palestine so therefore "no one" was being pushed off their land. Zionism was born in a time when almost unbelievable racism was routinely excused.
You are correct about the racist problem but that attitude goes back to the beginning and early Zionists apparently justified their plans to ethnically cleanse Palestine of its native population with racist rationalizations.
The Haaretz article you posted a link to "Civil rights group: Israel has reached new heights of racism" does expose facts which don't get heard here in America. (I had to search by the title, your link was broken)
Here is a blog entry I made almost 2 years ago to someone named Joe. I go into detail correcting his misrepresentations, distortions and omissions which are common in the Zionist/pro-Israel narrative. I go into detail about the racist plan to ethnically cleanse Palestine which had been planned from the beginning and was well underway BEFORE May 1948. Please see the links contained within especially the one to my article History of Israel and Palestine: 1947 UN Partition Proposal which I lay out the facts and footnote them. It has given some people food for thought based on facts, this was a response on my blog: "I want to thank you for such a detailed, and well cited post. It has given me much to read and much thinking to do. If the notion that the Arabs fled on the advice of the surrounding Arab Nations is a myth then it sheds a completely different light on the current refugee situation and the right of return for Palestinians."
Also please take a look at this blog entry in response to someone who wants us to ignore the history. I also talk about the current situation and point out the same fact you honestly did about Israel's racism, see the link about the fact that more than half the Jewish population of Israel - 53 percent - is opposed to full equal rights for Israeli Arabs, according to a survey conducted last month by the Israel Democracy Institute. Think about how racist this is. Imagine even trying to do a survey in America with such a question, going door to door asking Americans if they thought black people should have full equal rights. The question itself would be found offensive by the overwhelming majority of Americans! Think about the fact that a question like this can not only be asked in Israel but that a majority would actually say they didn't want the minority of Arabs now left inside Israel to have full equal rights!
Here is another link to my blog worth reading: Deceptions Sell Israel to the American Public.
*Changed phrase to how it is written on p139 of The Gun and the Olive Branch
from Israel Zangwill's "The Return to Palestine", New Liberal Review II, Dec. 1901, p.627
"The truth, when they learned it, might at first have disconcerted them. When Max Nordau, one of Herzl's earliest disciples, did so, he came running to his master crying: 'I didn't know that - but then we are committing an injustice.' But it did not seem to disconcert them for long." p139 of The Gun and the Olive Branch