What a challenging question! I am going to try and answer this straight from scripture! The first thing to understand is that Israel is God's chosen nation, but God loves the people of Israel just as much as he loves you and me. Remember that we are all created in God's image (Gen 1:27) and we are his children when we believe in Him and receive Him. 1 John 3:1 says, "How great is the love the Father has lavished on us, that we should be called children of God." The exciting news is that God loves everyone AS MUCH AS HE POSSIBLY CAN, His love was shown on the cross, and it is enough to cover all of our sins. (I promise I am getting to your question.) God chose Israel to be the venue for which this love, salvation through Jesus' death on the cross and resurrection, was made available to the whole world. Let me explain.
Galatians 3:8-9 says, "The scripture foresaw that God would justify the Gentiles by faith, and announced the gospel in advance to Abraham: 'All nations will be blessed through you.' So those who have faith are blessed along with Abraham, the man of faith." God appointed Abraham as the father of Israel, the "founder" of the Jewish nation, if you will, and He promised that all the nations of the world would blessed through his descendants. What does this mean? Jesus Christ descended from Abraham and David, fulfilling two major prophesies of the Old Testament. Since Jesus (God in the flesh) came and lived a holy life on earth, was crucified on the cross, and physically rose again on the third day, all nations are able to have eternal life. Israel was chosen because the precious Savior of the world would come through its offspring and make righteousness available to each of us. I encourage you to study Romans 4 for a deeper explanation of this. Israel is distinct because through Jesus, all nations are able to be saved.
For reasons that we cannot see, we do not know why God chose Israel as opposed to any other nation. We have to remember that God works all things out for His glory and for our good if we love Him. He is the potter, we are the clay. Romans 9:21 says, "Does not the potter have the right to make out of the same lump of clay some pottery for noble purposes and some for common use?" In other words, God may choose do to things a certain way, and even if we cannot see why, we can trust Him because he is GOD. He always works for His glory. And if we love Him, we do not have to be afraid of God's sovereign choice because we also know that He is working for our ultimate good as well (Romans 8:28).