But... that's how South African apartheid worked? The white government tried to represent the black as sovereign states ("Bantustans") and revoked South African citizenship from people who lived there. The rest of the civilised world ignored this idea, particularly since the "independent" states weren't even contiguous areas on a map. Map is below. Compare this to current maps of Palestinian control in the area Israel claims, and you'll find it remarkably similar. The "inspiration" is not even hidden.

It's literally in the Israeli Constitution that all Jews and only Jews can be are Israeli Nationals (edit: all Jews are per the constitution Israeli nationals, which is why any Jew can just land on the Tel-Aviv airport and ask for and get Israeli nationality).

Non-Jews in Israel can only be Non-Jewish Israeli Citizens which is something different in that country and has fewer rights than a national (for example, they have to apply if they want to move to live in some places and can be refused).

So at its very core Israel is and has been from the start an Apartheid state.

I always took the term "apartheid state" to refer to the way Israel treats Palestinians both in the West Bank, which despite being a separate country is also under military occupation by Israel, and at home within Israeli borders

Israel doesn't recognize Palestine as a country.