“What is the relationship between Israel and the church? The church is not Israel. Israel is an ethnicity, a nation, and a religious system. The church is none of these. When the Bible—Old and New Testaments—uses the term Israel, it always means a group of Jewish people, not the ‘ransomed people for God from every tribe and language and people and nation’ (Rev. 5:9), which is the church.
Some Reformed theologians see Israel as having been replaced by the church so that it is defined as spiritual Israel; the church in the new covenant occupies the place that Israel occupied in the old. But that would mean God reneges on his promises to the ethnic children of Abraham (Gen. 12:1–4; Deut. 30:1–5; Isaiah 11; Zech. 10:8–12).
Older, dispensational theologians in the vein of Lewis Sperry Chafer see Israel and the church as essentially two different peoples with whom God works separately throughout eternity. Their defining hermeneutic, which means method of interpretation, is never to blur the distinction between Israel and church. But that negates the statements of God breaking down the dividing wall to form one new humanity (Eph. 2:11–16).
It seems best to say there is one people of God saved by grace alone through faith alone in the promised Messiah alone who are organized in different administering institutions of God’s one-kingdom purpose. The physical and spiritual descendants of Abraham—Jewish people and especially Jewish believers—are the ‘first born’ of God’s working.
With the establishment of the new covenant in Acts 2, the people from every tribe and language and people and nation join in the body of Christ, sharing in the inaugurated promises of the new covenant, but not in the Mosaic religion and national structure of Israel.
The Old Testament prophecies of a national restoration of Israel (Ezek. 36:22–38; Acts 1:5–7) will be fulfilled by racially Jewish Christians in the millennium who finally ‘shall be my treasured possession among all peoples, for all the earth is mine; and you shall be to me a kingdom of priests and a holy nation’ (Ex. 19:5–6).”
–Mark Driscoll and Gary Breshears, Vintage Church (Wheaton, IL: Crossway, 2009), 58.