If Israel is 'racist', why do so many Muslims and Christians live there?

You would think that all of the Muslim citizens of Israel would have moved to Saudi Arabia, Iran, Syria, Egypt, Lebanon, Turkey or one of the Gulf states. Or, at least to the West Bank or Gaza. There must be stats somewhere that show some significant exodus of Muslims and arab Christians exiting Israel. Israel's big problem seems to be keeping Muslims from the above mentioned countries out, not keeping anyone in. This issue needs a little discussion. Try to make your propositions jibe with your conclusions.