It has long seemed to me that ethnocentrism is pretty much a universal aspect of human life. And it has long seemed to me that all of the world's "major" religions are ethnocentric. By ethnocentrism I don't simply mean a sense of choseness (religious or secular). Nor would I argue that ethnocentrism necessarily begins or ends with a notion of choseness. Yes choseness is generally an aspect of ethnocentrism. And yes a sense of choseness is at the heart of Judaism, Christianity, Islam, the Bahai Faith, and Mormonism. And while Eastern religions like Hinduism and Buddhism are sometimes seen as being characterised by a sense of toleration and often times were genuinely tolerant that doesn't mean that they are not without ethnocentric stain.
Ethnocentrism is much more complex than a sense of being a chosen or special people and the superiority complex that goes along with it. Ethnocentrism can take many forms: the superiority that comes from a perceived positive and "progressive" social activism (Quakers), the sense of musical superiority felt by the devotees of some rock group, the designer label sense of superiority held by those in some clique with a fashion sense or classes who wear Monolo Blahniks, the sense of right politics that most political parties have, the racism of the Jim Crow South, the Indian caste system, tribal conflicts throughout the planet, and so on. Ethnocentrism encompasses this sense of group superiority, ethnic superiority, racial superiority, gender superiority, clique superiority, fashion superiority, art appreciation superiority, and more. Virtually every aspect of human life down to mundane everyday interactions is rent through with ethnocentrisms big and small. It is an inherent part of every human group because when a community defines itself, it defines itself against some "other" and it generally sees itself as superior in some way, shape, or form to that other or those others.
It is thus not ethnocentrism or the lack of ethnocentrism that differentiates religious groups or groups in general. All human groups are ethnocentric in their own ways to paraphrase Tolstoy. What differentiates religious groups and groups within religious groups is the willingness or unwillingness to resort to violence in the name of their sense of ideological superiority. Historically Christianity and Islam, both monotheistic religions with a strong sense of their own rightness and a sometimes intense missionary zeal, have sometimes engaged in holy crusade, holy jihad, or holy ghettoisation to conquer the world for Christ or Islam. Hinduism and Buddhism have been less likely to engage in these "holy" wars and these isolate the infidel practises until recently, that is.
It is not a sense of specialness that differentiates Judaism from Buddhism and spurs contemporary Israel to build settlements in their "promised land". The Buddha's rejection of ascetic practises as ineffective in reaching the promised land of a release from suffering is, after all, a kind of kindler and gentler rejection of "inferior" religious practises of the other in favour of the superior and special four fold path to enlightenment and escape from suffering the Buddha proffered. And lets not forget that Buddhism gave us the genocide of Hindu Tamils in Sri Lanka and Hinduism has given rise (with a lot of help from good old Western nationalism) to the ethnocentric and fundamentalist Hindu National Party and widow burning. Every group thinks they are special.
In some ways I think Judaism is similar to the Japanese national religion Shintoism. Both are tribal religions that have ethnic and national dimensions. Neither, however, really has much of a missionary impulse for somewhat different reasons. And unlike Shintoism Judaism has had and continues to have international dimensions (the suffering servant theme in II Isaiah and his school) in which Israel is seen as a light to the world as a result of its suffering bringing the social ethical truth of YHWH to the world through its suffering, an impulse that I believe fed into the Jewish socialist movements). Suffering servant ideologies, while ethnocentric, are far removed from the crusade, the jihad, and the ethnic ghetto.
Some early forms of Christianity such as Paulinic Christianity with its elimination of several markers of Hebrew and Jewish distinctiveness (for example, circumcision and dietary restrictions), picked up and ran with this internationalist strain within the Hebrew faith (a strain of Christianity which linked the suffering Jesus to the suffering servant of II Isaiah) only to return, with Theodosius, who made what would become Roman Catholicism and Orthodox Christianity the religion of the Roman state and after the Reformation which split Europe ideologically once and for all a movement that would make Protestant varieties of Christianity the state religions of the monarchic and later nation states which arose in the West each of whom saw themselves as distinctively special, specially chosen. This process which turned an internationalist ideology into a nationalist ideology shows the universal power of notions of ethnocentric group specialness. By the way, none of this means that internationalist Christianity wasn't ethnocentric. It was. It maintained that it and only it was the only true form of "religion" on earth.
As to Judaism, the rise of the nation of Israel after World War Two has brought a nationalist dimension to Talmudic Judaism, a dimension that has led to the rise of Religious Zionism, a Zionism while similar to was also different from Secular Zionism. Secular and religious Zionism start from different places, the former in religious ethnocentrism, the latter in secular ethnocentrism. Where they are similar is that both Religious Zionism and Secular Zionism are heavily imbued with notions of blood and soil (but then who isn't?). Interestingly there is also a kind of anti-nationalist Judaism as well, the one which argues that the state of Israel is a heresy because the messiah hasn't come and it is only the messiah who can restore Israel to its (imagined?) former glory.
Now don't get me wrong here. I am not trying to justify or legitimise Israel's policy of building settlements in occupied Palestine. Far from it. In fact, I am one of the very few who supports the one state solution with a separation of synagogue, mosque, church, and state in a secular and democratic (Israel's Knesset is certainly more democratic and representative than the US Congress) Israel/Palestine along with the much missed Jewish democratic socialist and historian of Europe Tony Judt. This is a pipe dream, of course.
One certainly can validly argue that Israel is using settlements to create a fait accompli in the occupied territories. However, there are other factors at play in Israel's settlement policies as well including demographic pressures and financial pressures that any Israeli politician has to deal with particularly in the wake of the mass protests in Tel Aviv.
I don't primarily blame Israel for the Israeli/Palestine conflict. If anyone is to blame it is Europe. The blame for the present situation in Israel/Palestine after WWII can and should be laid at the doorstep of that "civilsed" continent (I like Mark Mazower's take on late twentieth century Europe as the dark continent). Europe's Antisemitism clearly helped create Secular Zionism (the Jewish version of Europe's blood and soil ideology) and Israel, one of the last European settler societies. And Europe's Antisemitism has, as we circle back to ethnocentrism and specialiness, good old Christian ethnocentric roots.