As the daughter of a Christian Palestinian father and a Jewish mother, Robyn Andraus can choose to be Arab or Jewish. Amazingly for someone who lives in a country shaped by decades of conflict, she rejects both: she is, she says, simply an Israeli. "Plenty of young people have a big problem with their identity. I am a mix, but I decided to enjoy it."

One reason Robyn, a vivacious 30-year-old, can enjoy this freedom is because she is born and bred in Jaffa. The ancient port is a vibrant, cosmopolitan place, home to Muslim businessmen and bakers, Christian teachers and pharmacists, Jewish artists and architects. Jaffa defies the stereotype of perpetual conflict between Arab and Jew, and it may be that this biblical city holds the key to Israel's future. For as the country prepares next month to commemorate the 40th anniversary of the Six-Day War, Jaffa's young generation, proud of their multicultural heritage, are reshaping ideas of national identity and loyalty.

"I am not Jewish, I am not Christian," explains Robyn over lemonade at a café ­ Books and Coffee ­ which is one of those extremely rare things, a jointly owned Jewish-Arab business. "My mother tongue is Hebrew, which I speak better than English or Arabic. My social circle is Israeli. My best friend is Israeli. The Zionist way of thinking is that if you are Jewish you are Israeli. If you are not Jewish, you are not. I reject that."

A former teenage Israeli national judo champion, Robyn works with underprivileged youngsters in some of Jaffa's most deprived areas and is as much at home among the hip bars and cafés of neighbouring Tel Aviv as Jaffa's run-down back streets. Her partner, Roni, is Jewish, and a documentary film-maker. His family welcomed her. "It was never an issue that my father is an Arab." The divide in Israel, she argues, is less between Arab and Jew than rich and poor. "There are mixed Arab-Jewish kindergartens, mixed schools and mixed cultural events. Rich Arabs and Jews go to the same places, the poor ones don't."

In many ways the relationship between Jaffa and Tel Aviv is symbolic of that between the Palestinians and Israel. Tel Aviv was founded as a satellite of Jaffa, but Jaffa is now a dilapidated suburb of Tel Aviv. It was not always thus. Jerusalem was Palestine's spiritual capital, but Jaffa was its cultural and political centre. And yes, its oranges were exported across the world. Before the 1948 Israeli war of independence, known to the Palestinians as "al-Nakba" ­ the catastrophe ­ Jaffa boasted its own newspapers, theatres, cinemas, cultural and literary associations, sporting and social clubs. Amin Andraus, Robyn's grandfather, moved there from Nazareth in the early Thirties. He built a beautiful Art Deco villa by the sea, where he lived with his wife Hanneh and their children: three daughters ­ Suad, Leila and Wedad ­ and son Salim, Robyn's father. Amin was one of just a few thousand Arabs to remain in Jaffa in 1948. Even today the mass exodus provokes bitter debate among Palestinians. "My father believed in staying and tried to convince people to stay," says Salim. "But they left because they thought it was only for a few days. It was very sad. Jaffa was let down by its population."

Amin died in 1974, but the Andraus name carries on through the generations. His great-grandson, Ido, plays happily in the garden of the family home as the sun sets over the Mediterranean. Ido will not have a religion, says Robyn. "We did not circumcise our son. We don't believe in mutilating children's bodies. I am going to raise him as a human being. I think religion is secondary, if not irrelevant. I want Ido to be aware of religions, and if he chooses one, that is fine. But I am not going to label him."

Robyn, like a growing number of Israelis, argues that Israel should become a secular Hebrew, rather than Jewish state, and one for all its citizens. Israel would not become Palestine and would continue to exist. But the Law of Return giving automatic right of citizenship to Jews would be abolished. Citizenship, and identity, would be based on different criteria: a shared Hebrew ­ and Arabic ­ language and culture, financial and economic ties, and simply living together on the most contested sliver of land in the world.

For Robyn, it's common sense. "My Dad's generation say they are Palestinians who live in Israel. I say I am an Israeli. My generation was born after 1948 when being Palestinian was not an option. I don't think anyone should have the right of return, Jewish or Palestinian. They should be allowed to immigrate if they would benefit the country. I was on a bus listening to a Russian junkie saying he only came to Israel because the heroin is cheaper here. Every country has its criminals, but we don't need to import them. Israel should become a normal country, and that's not such a big idea."

Except in Israel's frenzied political atmosphere, it is. Sami Abou-Shehade too argues for a change in the very nature of the Israeli state. Sami, 31, is a Muslim Arab and a postgraduate student at Tel Aviv University. He lives in Jaffa with his wife and young son. Some 20 per cent of Israel's population of seven million are Arabs. The older Arab generation was cowed and quiescent, traumatised by Israel's victories. But in recent years Israeli Arabs of Sami's generation ­ or "Palestinian citizens of Israel" as many now refer to themselves ­ have found their voice.

Bespectacled, articulate and intelligent, Sami deftly uses the freedoms of Israeli democracy to espouse the Palestinian national cause. He collects oral histories of the older generation of Jaffa in its glory days and conducts "alternative" tours of the city. The Zionist version of history sees the capture of Jaffa in May 1948 as a "liberation", but Sami outlines the reality of the "Nakba". He too is a regular at Books and Coffee. Sami argues that, despite being a democracy, in many ways Israel is not a modern state. "Israel sees all of its Jewish citizens as a big family, and this is how it deals with them. For example, when there is a car accident, there is five minutes on the news about everybody who was killed. Israeli Jews think of the state as some kind of family business. But when you are not part of the family, when you are excluded, the state gives you part of your rights, but as though this is more than you deserve. The function of a state is to provide services for its citizens, that's all."

The complex issues around Israel's Arab community are evolving in several directions. The arrival of al-Jazeera television has had a massive impact, says Sami. "The whole way of thinking about politics and international issues has changed. Al-Jazeera brought a totally different perspective. It opened us up to the Arab discourse between Islamists, nationalists, and democrats. The terminology of the news changes. Arabs are not the enemy. Palestinians are not terrorists."

Decades ago, Sami's grandfather, Ismail, cleared a blocked well for Amin Andraus. His reward was a suit of the finest English cloth, something unimaginable for a poor working man. In January 1948, Ismail helped recover the bodies from the wreckage of Jaffa's New Seray building, which housed the municipal administration, after it was blown to bits by the most extreme Zionist militia organisation, the Stern group.

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