The National Insurance Institute had to conduct an inquiry about the eligibility for burial assistance of the parents of the terrorist who massacred eight young students at Mercaz Harav yeshiva last Thursday. The consultations produced the determination that, no, they are not entitled to benefits accruing from the murderer's death while committing the premeditated murder of young students. The fact that such deliberations were deemed necessary attests not only to Israel's unique scrupulousness but also to the extraordinary problematics of coping with terrorists who hold Israeli rights. Though the direct involvement of Israeli Arabs in acts of terrorism has never extended to, say, the kind of sophisticated and coordinated brutality that saw four British Muslims blow up public transport targets in London in the July 2005 suicide bombings, the latest atrocity here is not the first to have been perpetrated by a local Arab. In 2001 a resident of the Galilean village of Abu Snan blew himself up at the crowded Nahariya train terminal. His family applied for and received NII benefits, as though his was an ordinary death. Only following legal wrangles were welfare payments stopped. The Abu Snan precedent facilitated the decision to deny support this time around. Nevertheless, the Jerusalem and Abu Snan cases differ. Galilee Arabs are full-fledged Israel citizens. East Jerusalem was absorbed into the capital's boundaries after the Six Day War, and its Arab residents were issued blue ID cards identical to those carried by other Israelis. They were eligible to apply for full Israeli citizenship but overwhelmingly chose not to do so, and so are classified as residents, rather than citizens. They are entitled to participate in municipal, but not Knesset, elections. Policy-makers decades ago doubtless assumed that the carrying of "blue" Israeli papers would denote at least acquiescence by the bearer to Israeli sovereignty. While few might publicly acknowledge this, many Palestinians avidly seek the advantages of life as Israelis. Thus, paradoxically, mere talk of a security fence around Jerusalem increased the capital's Arab population significantly in recent years. It triggered an influx of Arabs into Jerusalem, seeking the socioeconomic perks guaranteed to those who hold blue ID cards - documents that also allow unhindered travel throughout Israel. The demographic and security implications are unmistakable. Statistics from the Jerusalem Institute for Israel Studies show that Jerusalem's Arab population grew from 68,000 in 1967 to some 250,000 currently - a 367% rise versus 140% for the Jewish population during that time frame. In 1967, Jews comprised 74% of all Jerusalemites. Today that proportion is down to 66%. This is not just a function of birth rates but of that migration from the West Bank to Jerusalem, where Arabs can enjoy the best of both worlds: maintaining their Palestinian identity while benefiting from the advantages of Israeli residency. Dr. Guy Bechor of the Interdisciplinary Center in Herzliya suggests a threefold correction, beginning with a change in the appearance and color of the card accorded to residents. It must no longer, he argues, be indistinguishable from the blue card of bona fide citizens. This would apply to all non-citizen residents, regardless of ethnicity and religion. At a stroke this would solve some security concerns, since it would obviate the ease with which east Jerusalemites can blend into the Israeli scene. Bechor further advocates that NII benefits, underpinned by Israel's taxpayers, be earmarked exclusively for Israeli citizens. This would free up more resources for Israel's poor - both Arabs and Jews - and remove the prime incentive for Arabs who seek no genuine identification with Israel to reside under Israeli jurisdiction. Finally, Bechor points to an anomaly regarding whom the Central Bureau of Statistics counts as Israelis. Not only citizens are included in the total, but also residents. This inaccurately enlarges the proportion of Arabs in Israel's entire population. The inclusion of 250,000 non-citizen Jerusalem Arab residents raises the overall percentage of Arabs in Israel to a misleading 19. In reality, Arabs make up just 15% of the population, Bechor stresses. There's no disputing, as the Palestinian Authority indeed would be first to affirm, that most east Jerusalem Arabs do not consider themselves to be Israeli. So why count them as such? Israel's legislators would do well to examine Bechor's proposals. Last Thursday's terrorist attack, perpetrated by a killer who came from the "safe" side of the security barrier, underlines the imperative.