Back in July, Tim wrote a short post that asked some good questions:
1. We know that a whole host of Israelites have savingly believed God over the years, both before and after the advent of Christ.
2. We believe in the resurrection of the body, not an eternal state of disembodied “spirituality.”
3. Correspondingly, we believe in the renovation of the earth, just as we believe in the renovation of the body.
4. Surely a renovated earth would have geography, and since the renovation is a renovation of this earth, it seems at least plausible – nay, overwhelmingly likely – that the new earth will have the land of Canaan.
5. Since everyone has to live somewhere – why wouldn’t believing Israelites live in Palestine? Why should that be thought the least bit “strange”?
Check out Tim's article on the meaning of "all Israel" in Romans 11:26.
I would also add that national Israel is not reprobate. St. Paul makes clear that Israel "did not stumble so as to fall" (Rom. 11:11) and retains in an important sense "the adoption of sons, the covenants,...the promises, etc." (Rom. 9:4).
God's calling, election, and promises cannot fail.
Israel retains retains the title to all the promised blessings found in the OT. If they would pursue them by faith in their Messiah all the blessings would be granted.
As it is now, until Israel acknowledges her Lord Jesus she will never be secure in her own land.
I highly recommend historic premillennialist Barry Horner's fine book, Future Israel: Why Christian Anti-Judaism Must Be Challenged (B&H Academic, 2007), for a thorough treatment of the subject.