So, Bruce Springsteen, who was born in the USA, is by birth an American citizen with equal rights to all other citizens. When he fills out a form that asks for "nationality" he'd write down "USA." Citizenship and nationality are the same. Someone can change their nationality from French to USA by becoming a naturalized citizen. There is the category of dual nationality, but if someone is a Canadian/American like the august statesman Ted Cruz, this dual status doesn't diminish the value of their US citizenship.
Thus, when a defender of the state of Israel says, "Israel is a bastion of democracy, everyone has equal rights," most people wouldn't get the deception being practiced by that statement.
Israel has a peculiar definition of "nationality" and "citizen." This is based on the premise that Israel is the Jewish homeland, a Jewish state, above all else. The next premise is that "Jewish" is a nationality. Then under these circumstances, what is citizenship? What does it count for? "Not much, if anything," is the appropriate answer.
In the borders the rest of the world recognizes as the State of Israel (the post 1948 ones) there is a population of about seven million, but over 1.5 million inhabitants of Israel are Palestinians. They are recognized as citizens, but are not "nationals." To be a national with full rights, you have to be a Jew (and the definition is even narrower, since the government sanctioned Orthodox rabbinate determines who is a Jew). So in the Jewish nation only Jews have full rights. Citizens who are not Jewish nationals don't have full rights. Discrimination against non-Jewish citizens is legal. There are several laws that limit the rights of Palestinian citizens. There are restrictions on where they can live, they can't buy land in 80% of Israel, and are subject to extra-legal harassment. Restrictions and harassment are growing as the Jewish population of Israel becomes more racist and right wing. The Jews of Israel are headed toward a theocratic police state and a growing number of Israeli citizens...oops, I mean "nationals" prefer it that way.
Ironically, supporters of Zionist Israel often like to remark, "Actually, the Palestinians don't exist. There are no Palestinians, just Arabs who mistakenly live in territory reserved for the Jews. This is all propaganda that doesn't stand up to any serious examination (but "serious examination" is what is always missing in our infotainment news media).
It's ironic because the people who really don't exist are the Israelis. In practical terms there are only Jews and Arabs, plus assorted foreigners (the black Africans refugees get to be called "infiltrators" and "a cancer," among other epithets). Residents of the state of Israel are treated according to their status as Jews with full rights, and Arabs who come up basically empty in the rights department. From time to time some progressive, non-racist Jewish Israelis (there was a very recent case) try to have the status on their identity papers (all who live in Israel have to have these papers) changed from "Jewish" to "Israeli." The Supreme Court of Israel has ruled that there is no such legal status as "Israeli." Israeli is a null category. Jewish is a nationality and that gives you full rights. If you have another status, forgetaboudit!
These circumstances prevail in the state of Israel. What about the occupied West Bank? or Gaza? It's much simpler. All Palestinians in the West Bank have lived under martial law since 1967. In Gaza it was the same until the Israeli government of Ariel Sharon decided to withdraw from that territory in 2005. Hamas won the Palestinian Authority legislative elections in 2006 in Gaza (they actually won it in the West Bank too, this was quickly nullified). You could say that Hamas rules in Gaza, but the Israeli blockade has reduced life in Gaza to bare survival and isolation. Gaza has become an Israeli prison.
Speaking about "status," Israel's plans for expansion have always had as it's goal the inclusion of the West Bank and Gaza (along with anything else there for the taking, like a piece of Lebanon, for example) into one Eretz Yisrael, which, by one way or another, will be an exclusively, pristine, Jews-only state. Can you sell this as a democracy?