Lieberman and Loyalty

I don't really follow or understand Israeli politics, but the controversy over Avigdor Lieberman's proposal to institute a loyalty oath is puzzling me.

I know that reality is often different from how it is reported in the press so I welcome clarifications or explanations in the comments...

Basically, my understanding is that he is is proposing signing a loyalty oath to the state of Israel as a condition of citizenship. Why would this be considered controversial? It seems almost tautological.

Here are some reactions:

Ori Nir, a spokesman for Americans for Peace Now, said that expressions of solidarity by Israeli Arabs with the enemies of Israel should be considered protected political speech, and that asking Israeli Arabs to sign a loyalty oath only would alienate them further.

“Once you put them on the spot, by the mere act of doing that you're going to alienate them in such a way that you will create security challenges to the state,” Nir said. “You will put them on a spot where they will have to make some sort of a decision. That may lead some of them to a situation where they would say, 'You know what, the heck with you.' ”

[source]

This I think is an insane argument. Supporting the enemy of your state is "protected political speech"?

Here is a comment more in line with my thinking:

"Is he a racist? No, I don't think so," said Efraim Zuroff, famed Nazi hunter and head of the Simon Wiesenthal Center in Jerusalem. "But he's certainly a bit of a demagogue. He's offering 'solutions' to problems that are on a lot of people's minds, and he's playing on the fears of Israel's citizens. It's a mixture of politics, ethnic strife - not racism - and how he can increase the number of MKs in the Knesset.

"But you can't compare what he's doing to, say, Western Europe, where the minorities in many of those countries aren't trying to overthrow the very state in which they live," Zuroff continued. "I suspect that at least some Israeli Arabs, and surely many of their cousins in neighboring countries, do want to see Israel eliminated. So what he's doing is, he's putting Israeli Arabs on the spot and saying, do you want to be loyal to the state and receive its benefits? And if not, he's saying that they will lose their citizenship. He's playing on the reality that is the Middle East. That's not the classic definition of racism, but it is demagoguery."

[source]