What is the difference between saying "A Jewish State" and "a state whose population is predominantly Jewish?"

Sometimes I read a blog post and just wish I could make every one I know (and don't know) read it. Lawrence of Cyberia's "Palestinians are Nobody's Negroes" is one of those, although I am not keen on the title. It is about why Palestinians refused to formally recognize Israel as a "Jewish State." He writes:

There is no people on Earth that would agree to vocalize its own racial inferiority as a precondition for freedom, yet you're surprised when the PLO won't do it?