"In the eyes of a watching world, the fact that the great-grandmother of an Israeli soldier died in Treblinka is no excuse for his own abusive treatment of a Palestinian woman waiting to cross a checkpoint. "Remember Auschwitz" is not an acceptable response.
In short: Israel, in the world's eyes, is a normal state, but one behaving in abnormal ways. It is in control of its fate, but the victims are someone else. It is strong, very strong, but its behavior is making everyone else vulnerable. And so, shorn of all other justifications for its behavior, Israel and its supporters today fall back with increasing shrillness upon the oldest claim of all: Israel is a Jewish state and that is why people criticize it. This - the charge that criticism of Israel is implicitly anti-Semitic - is regarded in Israel and the United States as Israel's trump card. If it has been played more insistently and aggressively in recent years, that is because it is now the only card left.
The habit of tarring any foreign criticism with the brush of anti-Semitism is deeply engrained in Israeli political instincts: Ariel Sharon used it with characteristic excess but he was only the latest in a long line of Israeli leaders to exploit the claim. David Ben-Gurion and Golda Meir did no different. But Jews outside of Israel pay a high price for this tactic. Not only does it inhibit their own criticisms of Israel for fear of appearing to associate with bad company, but it encourages others to look upon Jews everywhere as de facto collaborators in Israel's misbehavior. When Israel breaks international law in the occupied territories, when Israel publicly humiliates the subject populations whose land it has seized - but then responds to its critics with loud cries of "anti-Semitism" - it is in effect saying that these acts are not Israeli acts, they are Jewish acts: The occupation is not an Israeli occupation, it is a Jewish occupation, and if you don't like these things it is because you don't like Jews.
In many parts of the world this is in danger of becoming a self-fulfilling assertion: Israel's reckless behavior and insistent identification of all criticism with anti-Semitism is now the leading source of anti-Jewish sentiment in Western Europe and much of Asia. But the traditional corollary - if anti-Jewish feeling is linked to dislike of Israel then right-thinking people should rush to Israel's defense - no longer applies. Instead, the ironies of the Zionist dream have come full circle: For tens of millions of people in the world today, Israel is indeed the state of all the Jews. And thus, reasonably enough, many observers believe that one way to take the sting out of rising anti-Semitism in the suburbs of Paris or the streets of Jakarta would be for Israel to give the Palestinians back their land."
Excerpt from Tony Judt's article, The Country that Wouldn't Grow Up
This was published in Haaretz in 2006, but it's only gotten more relevant and urgent since then.