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The question can be read in two distinct ways based on context.
1) What is the impact in 1948 of the Jews in Mandatory Palestine declaring Israel as their state? -- This led to immediate attack by their Arab neighbors and resulted in the Jewish-Arab Engagement and the Arab-Israeli War of 1948-9.
In 1948, when the British announced the end of the Mandate, the Jewish Settlement used the opportunity and the legal avenue opened by U.N. Resolution 181 to declare a State (Israel). The day after, seven Arab armies from neighboring countries joined with the Arab Militias already operating in Mandatory Palestine to combat the new State. As the fighting progressed, Israel was able to repel the invaders and claim about 78% of the British Mandate of Palestine as the area of their new State. The War of Independence is considered by most to be an Israeli victory.
Throughout the fighting (from 1947-1949), numerous Palestinians were forced from their homes inside what would become Israeli territory. Other Palestinians left in fear that they too could be attacked and forced to leave. This climate of fear and and desire to leave was increased by those Arab leaders who actively encouraged such activities claiming that it would get civilians out of the way while the fighting occurred. After the War and the elimination of Israel, the Palestinians would return without worry. This did not happen, since Israel was victorious. Palestinians call this event (the overall war and removal from their homes) the Nakba or Great Catastrophe. Israel has refused the Right of Return for Palestinians, claiming that if they were allowed to return in large numbers, Israel would no longer have a Jewish majority, putting the entire purpose of a Jewish State in jeopardy.
2) Why is it so important to many Israelis and Jews outside of Israel that the Palestinian Authority call Israel a Jewish State? -- This is the recognition of Israel's mission for the Jewish people. Israel is a nation-state in the 19th century understanding of that term. This is in much the same way that Germany, Italy, Armenia, and many other countries are nation-states. Nobody questions Germany's right to maintain an ethnic-German majority in Germany or to base German laws on German cultural values. It is self-understood that if Germany wished to close its border to Immigration, they could do so and maintain an ethnically German State. (They technically cannot close the border to EU migrations because of EU Law, but most immigrants to Germany are from countries outside of the EU.)
However, there is a strong push to allow resettlement of Palestinian refugees and their descendants into Israel, which would violate the Jewish national culture of the State of Israel. The entire purpose of the State of Israel is to create a State for Jews in both the sense that it is a place where they can live and a place permeated by Jewish values. The recognition by the Palestinian Authority that Israel is a Jewish State would be an implicit acquiescence to what Israel requires as the basis of Israeli-Palestinian negotiations: Palestine should be the State of the Palestinian Arabs. Palestine should be responsible for resettling the refugees of its people, not Israel. Because of this very implication, the Palestinian Authority has resisted calling Israel the Jewish State.
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Is israel an all Jewish state now?
Israel is a Jewish state, but 20% of its citizens are not Jewish.
Does the US recognize Israel as a Jewish state?
No country has ever specifically performed the act of recognizing Israel as a Jewish State when they performed the act of recognition. However, US politicians have referred to Israel as a Jewish State and made clear that they believe Israel to be a Jewish State.
Why does Israel insist on declaring the country as Jewish?
Mandate of Israel: To attempt to preserve the Faith and identity of the House of Ya'akov/Israel. A Jewish State is also an affirmation of the Covenant that the G-D of Israel made with the Israelites/12 tribes of Ya'akov. Any attempt by any one to descredit this identity is an act of aggression against the G-D of the universe.
What is the Jewish state today?
Israel.
When it was learned the British were going to leave what name did the Jewish leaders proclaimed establishment of a Jewish state to be called?
Israel.
Is Hanukkah celebrated in Israel?
Yes, since Israel is the Jewish State.
What Jewish state was an ally of us in 1950-1960?
Israel is the only Jewish state in existence.
What were the Jewish nationalists who were determined to build a Jewish state in Israel called?
Zionists
What name did the Jewish leaders proclaim the establishment of a Jewish state to be called?
Israel
Why did Israel declare itself as a Jewish state while all world states accept multireligions?
Israel did not declare itself a Jewish state, it was created as a Jewish state. Nor does all the world accept multi-religions.
What relationship does the nation of Israel have to Jewish identity and faith?
The Modern State of Israel has little to do with Jewish faith, but a lot to do with Jewish identity. Israel is the only Jewish State in the sense that Greece is the only Greek State (except perhaps Cyprus). Israel actualizes many of the ideals of Jewish leadership and society and represents what being Jewish means as a group of people and a society. However, according to Jewish faith, there is no need for a State as God will protect His people. This is why Israel has little directly to do with faith. Regardless, much of the religious Jewish decisions and schools are in Israel and Israel's Jewish orientation facilitates the growth and development of these institutions. In terms of Jewish identity, Ahad Ha'am explains that the Jewish Soul is intrinsically connected to his history and in the same way that a German-American can never be as properly German as a German in Germany, the People of Israel can never be as properly Jewish if they are not in the Land of Israel. The relics in that land speak to a Jewish sensibility and character.
What Jewish state ended at the hands of the Romans?
The Hasmonean Kingdom, which was the last Jewish State in the Land of Israel prior to the Modern State of Israel, was defeated and conquered by the Romans in 37 BCE.
