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REFILE-Disaffected Israeli Arabs shrug at elections in Jewish state

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(Refiles to fix reference to "she" in 28th paragraph)

* Barely half of Arabs in Israel are expected to vote

* Jewish state's minority Arabs disillusioned by leaders

* Peace deal no longer top concern for Israeli-Arabs

By Jihan Abdalla

UMM EL-FAHM, Israel, Jan 15 (Reuters) - Disillusioned, disappointed and divided, Israeli Arab voters will traipse to the polls next week in ever dwindling numbers, aware that none of their community will have any say in how the country is run.

Whoever wins the Jan. 22 parliamentary election, Israeli Arab parties will almost certainly not be part of the next coalition government, or indeed want to be, opening the door to four more years of often futile opposition.

"Arabs have stopped believing in the democratic tools at their disposal," said Hanin Zoabi, an Arab member of the Knesset running for the National Democratic Assembly - one of three Arab parties that look likely to pick up a handful of seats.

One of Israel's poorest and least politically engaged minorities, Arabs struggle to find their place in an avowedly Jewish state, and many doubt that participating in elections will change their lot.

Around half of the community will vote, down from 75 percent in 1999, a Haifa University poll found last month.

Arabs complain of rampant discrimination including inferior municipal services, unfair allocation of funds for education, health and housing, and curbs on building permits, leading to illegal construction out of frustration - and demolitions.

They also cite the lack of a right to family unification if they marry Palestinians from the West Bank or Gaza.

Mainstream Jewish politicians say Israeli Arabs have seen their wealth and welfare rise substantially since the founding of the state, but concede that they are marginalised and more should be done to plug them into Israel's thriving economy.

They also accuse the Arab parties of being more concerned about "external" issues, such as the peace process, while not doing enough to promote the needs of their own constituents.

Whatever the reason for Israeli Arab problems, the result can be seen on the garbage-strewn streets of towns like Umm al-Fahm, home to 48,000 Arabs and close to the boundary of the Israeli-occupied West Bank, where Palestinians seek statehood.

Israeli Arabs, who comprise a fifth of Israel's total population, are descendants of residents who stayed on after the 1948 war of Israel's founding, in which hundreds of thousands of fellow Palestinians fled or were forced to leave their homes.

More than half live below the poverty line, compared with a national average of 20 percent, according to official figures, while some 30 percent are unemployed, five times the national figure, a Tel Aviv University study estimates.

"Arabs are undecided on the merits of their political participation and, given the current facts, whether their votes make a difference," Tel Aviv University lecturer Amal Jamal told Reuters. "The majority are thinking: 'What's the point?'"

BREAD AND BUTTER

In Umm el-Fahm, memorials on the main street commemorate youths killed by Israeli police in 2000, a bleak reminder of tensions between Arab citizens and the Jewish state.

Thirteen Arabs, shot while demonstrating in solidarity with a Palestinian uprising, are honoured as "martyrs" by locals, who resent the fact that none of the officers were charged.

"It is easier to define us by what we are not, and to most people, we are neither fully Palestinian nor fully Israeli," said resident Majed Kamal, 37, looking at the brown, dry wreath resting on one of the youth's tombstones.

But despite ever present tensions tied to the decades-old Middle East conflict, it is bread and butter issues that concern most Israeli Arab voters, not war and peace.

Some 57 percent of Israeli Arabs polled by the University of Haifa in December said unemployment, housing, health and education were their main concerns. Only eight percent cited the Palestinian-Israeli conflict.

Talks between Israelis and Palestinians collapsed two years ago over expanding Jewish settlement on occupied land, and Israel's Arabs doubt they will resume any time soon.

"The peace process is not really relevant at the moment," said Raed Farrah, 29, who works at a coffee shop in nearby Nazareth. "So why worry about it?"

Some 1.6 million Muslim and Christian Arabs live mainly in cities and villages in the north of Israel where they administer their own municipal affairs and run their own schools.

Interest in local affairs far outstrips national politics - some 80 percent of Arabs voted in municipal elections in 2008 against 53 percent who took part in the parliamentary ballot a year later - 12 points below the national average.

Under Israel's proportional representation system, experts say Arab groups could secure up to 20 of parliament's 120 seats if the turnout were higher and if squabbling Arab politicians managed to present a more united front.

The three Arab-led parties - Ra'am-Ta'al, the National Democratic Assembly and Hadash - won just 11 seats in 2009. Some Arab votes also went to mainstream Jewish groups such as the Ultra-Orthodox Shas party, which campaigns openly in Israeli Arab towns, promising ever more generous welfare handouts.

By contrast, the Islamic Movement in Israel, an offshoot of the Muslim Brotherhood now ascendant in Egypt, is urging its followers to boycott Tuesday's ballot.

With a network of community services, this conservative movement is gaining traction and the Haifa university poll said less than 50 percent of Israeli Arabs might vote on Jan. 22, further diluting their national voice.

"We are faced with only two options. Either we give in as a marginalised minority, or we fight," said parliamentarian Zoabi.

She angered Jewish colleagues in 2010 for joining a Turkish protest boat that tried to break the blockade of the Gaza Strip.

In an unusual move, liberal newspaper Haaretz published an editorial in Arabic on Tuesday urging a more robust turnout, saying "despair and abstention" would bring nothing good.

"Massive Arab turnout in this election would serve all those who aspire to democracy in this country, Jews and Arabs alike. The Arab citizenry must get out and vote  for peace, for equality and for democracy," it wrote. (Editing by Mark Heinrich)

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