People from Israel are called Israelis.
Israelis
Deuteronomy describes the love relationship between God and His people. It reminds a covenant people of what God has done and what they must do. Moses' three sermons gives Deuteronomy three parts: they call of the past, the expectations of the present, and the commitments to the future. Deuteronomy describes God's covenant faithfulness and the choice Israel has to be a people of curse or of blessing.
Israelis.
Rav.
(Referring to modern Israel): Israelis. (Referring to the Children of Israel of The Bible): Jews.
Israel
children of israel
(Referring to modern Israel): Israelis. (Referring to the Children of Israel of the Bible): Jews.
Children of Israel.
They first called it Canaan, then the Land of Israel, then Israel & Judea, then it was united back to Israel, then The Romans renamed it Palestine, then the Modern Jews named it the State of Israel.
Answer 1There is no Israel its Palestine.Answer 2It depends on the Muslim. Most Arab-Israelis are Muslim and call the State of Israel as "Israel", even if they object to the policies of that state (like Hanin Zoabi). Additionally, most Muslim intellectuals in Western countries or liberal leanings call the area Israel. Most Muslims outside of Israel call the land "Palestine" and call the government "the Zionist Entity" or the "Jewish State".