For some reason, I have been asked this question three times by extended family members during the past week. I am not raising this question in order to be controversial. Nor am I raising it in order to resolve all the problems surrounding the Israeli-Arab conflict. (I do not even know all of the issues involved in their conflict.) I am addressing it because I have been asked about it a number of times over the last few days, and because my understanding of the identity of God's chosen people seems to be new to many people.
I believe that God's chosen people include both Jewish and Gentile believers in Christ (the Messiah). In the past, the Jewish people alone were considered God's chosen people. However, Jesus expanded the composition of the chosen people to include both Jewish and Gentile believers. As the apostle Paul wrote, "In him (Christ) we were also chosen, having been predestined according to the plan of him who works out everything in conformity with the purpose of his will, in order that we, who were the first to hope in Christ, might be for the praise of his glory. And you also were included in Christ when you heard the word of truth, the gospel of your salvation. Having believed, you were marked in him with a seal, the promised Holy Spirit, who is a deposit guaranteeing our inheritance until the redemption of those who are God's possession--to the praise of his glory" (Ephesians 1:11-14). In effect, Paul was saying that God's chosen people are those who have "heard the word of truth, the gospel of your salvation," have "believed," and have received the Holy Spirit as "a seal...guaranteeing our inheritance."
The apostle went on to write, "Therefore, remember that formerly you who are Gentiles by birth and called 'uncircumcised' by those who call themselves 'the circumcision' (that done in the body by the hands of men)--remember that at that time you were separate from Christ, excluded from citizenship in Israel and foreigners to the covenants of the promise, without hope and without God in the world. But now in Christ Jesus you who once were far away have been brought near through the blood of Christ. For he himself is our peace, who has made the two one and has destroyed the barrier, the dividing wall of hostility, by abolishing in his flesh the law with its commandments and regulations. His purpose was to create in himself one new man out of the two, thus making peace, and in this one body to reconcile both of them to God through the cross, by which he put to death their hostility...Consequently, you are no longer foreigners and aliens, but fellow citizens with God's people and members of God's household...This mystery is that through the gospel the Gentiles are heirs together with Israel, members together of one body, and sharers together in the promise in Christ Jesus" (Ephesians 2:11-16; 2:19; 3:6).
Also, please notice the point made by the apostle Paul when he wrote, "You are all sons of God through faith in Christ Jesus, for all of you who were baptized into Christ have clothed yourselves with Christ. There is neither Jew nor Greek, slave nor free, male nor female, for you are all one in Christ Jesus. If you belong to Christ, then you are Abraham's seed, and heirs according to the promise" (Galatians 3:26-29).
In Romans 9-11, Paul expresses his desire for all of Israel to be saved. He explains that many have abandoned God by refusing to believe in their Messiah, but he also expresses the hope that they will return to their God in the future. In the meantime, the believing Jewish people remain the remnant of people in a covenant with God, and believing Gentiles have been "grafted" into the covenant relationship with God through their trust in Jesus the Messiah.
In Christ, God has brought together Jews and Gentiles as believers. Together, they constitute God's chosen people. The chosen people are defined by their faith, rather than their ethnic backgrounds, cultures, or heritages.
(Although my understanding may seem new to many people, I believe it is as old as the New Testament. Furthermore, I am not alone in seeing God's chosen people as Jewish and Gentile followers of Christ. Please see the works of scholars like Dr. John Piper, pastor of Bethlehem Baptist Church in Minneapolis, for similar views. One of his sermons--www.desiringgod.org/ResourceLibrary/Sermons/ByDate/1992/810_Israel_and_Us_Reconciled_in_One_Body/-- would be an excellent place to start.)