I'm amused by how angry this is making the crowd here.
Here's the deal.
This isn't one Rabbi, its a 30 Rabbi's and its their wives and the population is listening enough that Barak had to say this:
Defense Minister Ehud Barak warned on Wednesday that anti-Arab letters signed by rabbis and wives' of rabbis would lead to a wave of racism that would threaten to "take over" Israeli society.
http://www.haaretz.com/news/national/barak-anti-arab-letters-by-rabbis-and-rabbis-wives-leading-israel-into-dark-place-1.334093
This is in response to two calls, to not lease to arabs and to not date arabs.
Now, its heartening to hear Barak speak out against such blatant racism, however, the same article I'm quoting from suggests that about half the jewish population of Israel supports these views:
The letter was published shortly after a new survey revealed that a full 44% of Israeli Jews support a letter issued by rabbis earlier this month forbidding the sale or rental of properties to non-Jews in the city of Safed. The survey reported that 48% of Israeli Jews oppose the rabbis' religious edict.
When you have about half the country supporting these calls, its not hard to say that they can or are becoming an unofficial policy. Unless the gov't comes out hard against them, they will start to be enacted. And I'm waiting for more then mere statements saying they are against these two calls, I'm waiting for the gov't to say there are penalties if you enact these calls. Until then, its a mere 'tut tut' or slap on the wrist.