I'll just ignore this bit since it's pure nonsense
It's basically "birds of a feather". Except Jerusalem, and even then it's segregated. It's just that each prefers to live with his own kind. Arabs in Israel wouldn't like Jews living in their neighbourhood either, I imagine.
But it's not just along national lines. Druze live with Druze, Christian Arabs live sort of segregated within Christian quarters of an Arab town, then you've got the split along the economic line, etc.
But despite people prefer to
live with their kind, there is a lot of interaction. Shopping, for example. I remember going with my parents to Nazareth to buy shoes from Arabs, and to Kfar Saba to buy vegetables from Arabs. And Kfar Saba is a "Jewish" city. So either the Arab shop keepers lived there, or they had their business there.
Tel Aviv (Jewish) is right near Yaffo (Arab). We travelled to Yaffo several times, and to the Druze towns too, to buy some other things.
So not only do people travel to each others' communities, they take their small children with them.
Also, in my (Jewish) town where I was working I had an Arab co-worker. A very nice guy. We never ever had even a hint of a problem re: the Israeli-Arab issue.