Now, those Israelis who worry about this, and dread being outnumbered by Arabs in their own country, aren't necessarily racists. The two sides of Israel's nature--its Jewish and democratic soul--have always coexisted uneasily, and would be quickly upset by a demographic shift. Israel was founded and internationally recognized as a refuge for Jews, and it is legitimate that modern Israelis are determined to keep it so. Given the way Jews have been treated in Arab lands, moreover, they have grounds to fear life under an Arab majority.
For all these reasons, a little demographic-induced panic is understandable.
That said, Lieberman and Netanyahu's approach is completely wrongheaded; the only thing it's guaranteed to produce is the opposite of its stated objective. Rather than create loyal citizens, a Jewish loyalty oath will further alienate and radicalize Israel's Arabs, who are already growing steadily less moderate thanks to mistreatment by the state (though it still bears repeating that they fare far better in just about every sense--socially, economically, and in terms of political and legal freedom--than Arabs living in Arab lands).
But the Lieberman approach is worse than wrongheaded. It's also--and here's the tragic irony of this whole story--unnecessary. For as a close read of those statistics bureau numbers cited above reveals*, while the Arab Israeli birthrate is indeed still higher than that of the Jews, it's actually not by much: 3.84 kids per woman for Arabs versus 2.96 for Jews.
Even more striking is the trend. In 1964, Arab women were averaging 9.23 kids a piece. Today, just 3.84. Let me repeat that in slightly different language: In 45 years, the Israeli Arab birthrate has fallen from about 9 kids per woman to around 4 (in the same period, the Jewish birthrate fell from about 4 to 3).
The implications of this statistical bombshell are twofold. One, it reveals that Israelis' existential fear of being swamped by their own Arab population--the fear that gives rise to noxious measures like the new oath--turns out to be not so well founded after all.
And two, it suggests that if Israelis are still concerned about the problem, the best way for them to deal with it is not through measures like the loyalty oath, that will help convince Israeli Arabs that they are second class citizens, but the opposite. For the explanation for the falling birthrate in Israel is the same as it is everywhere: as women get richer and more educated, they start having fewer kids. So if Israelis are still convinced they have an Arab "problem" and want to deal with it, their best bet would be to continue to ensure the economic and social integration of those same Arabs.
Doing so should appeal to Israel's moderate mainstream because it will help guarantee that the Arabs remain loyal citizens in the long term, as it will give them a greater long-term stake in the state.
As for hateful xenophobes like Lieberman--well, even they should find something to like. Since by lowering birthrates, at least it will reduce the number of their enemies.
* Many thanks to my intrepid former Newsweek comrade, Jerusalem bureau chief Dan Ephron, for pointing this out