Historically, there has been two main theories regarding the Church's relationship to Israel. In replacement theology, the Church replaces Israel such that Israel has no redemptive future. In separation theology (an aspect of dispensationalism), while God has a future for Israel, there is a distinction between Israel and the Church that is preserved throughout all time, with no overlap of the two.
Is it possible that both of these popular positions have been wrong? Is there a middle ground of truth?
Proper and Improper Distinctions
In discussing the Church and Israel, the first thing to realize is that the Bible rarely makes a parallel distinction between national Israel and the Church (possible exceptions being Matthew 23:39 and Romans 11:26). Biblically, Israel is a nation, not a spiritual entity. As a nation of people (like any other nation of people), it contains both saved and unsaved. When the Bible speaks of Israel as a spiritual entity (the saved of Israel), it is referring to remnant Israel (which forces us to ask, "Is there a distinction between remnant Israel and the Church?"--a question we will address shortly).
Do not cause anyone to stumble, whether Jews, Greeks or the church of God--even as I try to please everybody in every way. For I am not seeking my own good but the good of many, so that they may be saved. (1 Corinthians 10:32-33; italics added)
This passage is often used to justify a parallel distinction between Israel and the Church, but that is not what the passage is doing or saying. The immediate context shows that "Jews" refers to unsaved Jews, "Greeks" to unsaved Greeks, and the "church of God" to the saved (whether Jew or Greek). Therefore, the passage is consistent with the rest of the Bible in that it makes a parallel distinction between (1) Jew and Gentile, and between (2) the saved and the unsaved. Also consistent with the rest of Scripture, it does not make a parallel distinction between national Israel and the Church--which would be a category error.
Why then do people want to replace national Israel with the Church or separate Israel and the Church? The problem is threefold. First, people usually equate "Church" with Gentiles, even though both Jews and Gentiles make up the Church (Ephesians 3:6). The second problem is that people often equate "Israel" with Jews. That, too, is against the Scriptures. Gentile believers become citizens of Israel (Ephesians 2:12, 19). The third problem is that people usually do not bother to make the necessary distinction between national Israel and remnant Israel, even though the Bible clearly makes that distinction (Romans 9:6-8, 11:1-7).
The situation is not as black and white as people have made it. There are gray areas that need to be explored and understood. "Church" does not mean Gentiles only. "Israel" does not always mean Jews only. And there is a significant theological difference between national Israel and remnant Israel.
What is the Church?
The Church is the assembly of people, whether Jew or Gentile, who have been called out of the world to form the spiritual Body of Christ (Ephesians 5:23; Colossians 1:18; 1 Corinthians 12:13). Those in the Church come together by the Spirit and through the Messiah. They are said to be "in Christ" (Romans 8:1; 2 Corinthians 5:17; Ephesians 1:13).
What if he did this to make the riches of his glory known to the objects of his mercy, whom he prepared in advance for glory--even us, whom he also called, not only from the Jews but also from the Gentiles? (Romans 9:23-24; italics added)
The Church is Jews who have been physically called out of the nations, but also spiritually called out from unbelieving Israel, and Gentiles who have been spiritually called out of the nations to worship the God of Israel.
Both spiritually called-out peoples form one called-out people known as the Church. These called-out ones are saved by faith in the pattern of their spiritual father, Abraham (Romans 4:11). Thus, while only some in the Church are physically Jewish, all in the Church are spiritually Jewish. They are circumcised of the heart (Romans 2:29), the offspring of Abraham (Romans 4:16) and citizens of Israel (Ephesians 2:12, 19).
What is Israel?
Israel can mean several things. First, it often denotes national Israel--the nation whose citizens are physical descendants of Jacob/Israel. Second, it can mean those physical descendants of Jacob who have not responded to the call of God (Romans 9:31, 11:7). Third, it can mean those Jews (the remnant) who have trusted in the promises of God.
It is not as though God's word had failed. For not all who are descended from Israel are Israel. Nor because they are his descendants are they all Abraham's children. (Romans 9:6-7; italics added)
Being a physical descendant of Abraham, while it does bring an advantage (Romans 3:1-2), does not mean one is automatically a spiritual descendant of Abraham (Romans 2:28-29; John 8:39; Matthew 3:9). "Not all who are descended from Israel are Israel." A person can be part of national Israel, and yet not be part of remnant Israel. There is an Israel within Israel, a subset of physical-and-spiritual Jewish people (remnant Israel) among the group of physically Jewish people (national Israel).
When Gentiles become spiritual descendants of Abraham through faith in Jesus Christ, they become part of this subset also, part of remnant Israel. That believing Gentiles are placed within remnant Israel is clearly shown by Paul's illustration of the olive tree.
If the part of the dough offered as firstfruits is holy, then the whole batch is holy; if the root is holy, so are the branches. If some of the branches have been broken off, and you, though a wild olive shoot, have been grafted in among the others and now share in the nourishing sap from the olive root, do not boast over those branches. If you do, consider this: You do not support the root, but the root supports you.
You will say then, "Branches were broken off so that I could be grafted in." Granted. But they were broken off because of unbelief, and you stand by faith. Do not be arrogant, but be afraid. For if God did not spare the natural branches, he will not spare you either. Consider therefore the kindness and sternness of God: sternness to those who fell, but kindness to you, provided that you continue in his kindness. Otherwise, you also will be cut off. And if they do not persist in unbelief, they will be grafted in, for God is able to graft them in again.
After all, if you were cut out of an olive tree that is wild by nature, and contrary to nature were grafted into a cultivated olive tree, how much more readily will these, the natural branches, be grafted into their own olive tree! (Romans 11:16-24; italics added)
The Olive Tree
To understand this complex passage, it will be helpful to analyze its terms.
(1) Holy Firstfruits/Root. While some consider Abraham the holy firstfruits/root that makes the whole batch and the branches holy, it is more likely that Jesus holds this position. In Pauline theology and throughout God's Word, the Messiah is the only person who can make others holy (Isaiah 53:2-6; Romans 5:18-19, 10:4; 1 Corinthians 1:30; 2 Corinthians 5:21; Ephesians 5:26; Philippians 3:9; esp. Hebrews 2:11, 11:39-40).
Further evidence is found in Romans 9:3-4. "For I could wish that I myself were cursed and cut off from Christ for the sake of my brothers, those of my own race, the people of Israel." Paul likens separation from Christ as being "cut off" from Him, language consistent with the olive tree metaphor and Christ as its root.
(2) Wild Olive Shoot. This is a reference to an individual Gentile. A shoot is a young, tender sprout, an undeveloped branch.
(3) Natural Branches. This is a reference to Jewish believers. A Jewish believer is a natural branch, whereas a Gentile believer is a wild olive shoot.
(4) Olive Tree. Non-believing Jews are not part of the olive tree. They have been broken off. Therefore, national Israel must not be in view as the olive tree. But the olive tree must represent some aspect of Israel, because, for Jewish believers, it is their own olive tree.
The olive tree represents remnant Israel. This idea is highly supported by the context of the passage. Previously, Paul has mentioned true Israel (9:6), the remnant of Israel (9:27, 11:5), the elect of Israel (11:7).
Remnant Israel = the Church
The olive tree represents remnant Israel, but does it also represent the Church? The olive tree is a group of Jews and Gentiles made holy by the Messiah. That is also an accurate description of the Church (Ephesians 3:6). With the olive tree metaphor, Paul was writing to Gentile believers (Romans 11:13), members of the Church. And yet, the context of the olive tree metaphor was not the Church per se. In Romans, Paul's first use of ekklesia comes in Chapter 16 (vv. 1, 5, 23), where it refers to local assemblies, not the entire body of believers. The context of the olive tree metaphor is remnant Israel (Romans 11:5, 7)--"their [Jewish people's] own olive tree" (11:24).
If Paul had confined his olive tree illustration to include Jewish people only, remnant Israel might have been something separate from the Church, or something placed within the Church. Since Gentile believers are grafted into the olive tree, however, it is clear that remnant Israel is not confined to physical Jews only, but rather, contains the same redeemed peoples who are members of the Church.
Paul's olive tree metaphor is similar to his human body metaphor (Romans 12:4-5; 1 Corinthians 12:12ff). The fact that he uses the two metaphors so close to one another (Romans 11 and 12) shows he is speaking about the same group of people in both. In the body metaphor, the Messiah is the head that gives direction to the rest of the body. Similarly, in the olive tree metaphor, the tree gets its sustenance and origin from the Messiah. In both metaphors, the membership is both Jew and Gentile. For the one: Jewish and Gentile body parts; for the other: Jewish branches and Gentile shoots.
A third metaphor is the spiritual temple spoken of by both Paul and Peter (Ephesians 2:19-22; 1 Peter 2:4-6). Here, the Messiah is the chief cornerstone and the redeemed peoples (Jew and Gentile) are living stones who form a spiritual building. All three metaphors--olive tree, human body, spiritual temple--speak of one and the same group of redeemed Jews and Gentiles. This group can be referred to as the Church, the Assembly, the Congregation, the Body of Messiah, the Body of Christ, God's household--which Gentile believers are no longer alien to (1 Timothy 3:15; Ephesians 2:19), or remnant Israel--which Gentile believers are grafted into (Romans 11:17).
The Church: New and Not New
The Church is new. In the New Covenant Scriptures, the first mention of the Church is found in Matthew 16:18, where Jesus spoke of building His Church. Thus, the Church is a new undertaking, specifically because it is the Messiah's congregation that He would build on the basis of His atoning death and resurrection. Like Moses who brought the ekklesia (the Israelites) out of Egypt physically, the Messiah would bring His ekklesia out of the world spiritually, to form a spiritual assembly that included both Jews and Gentiles.
The Church is also new regarding the New Covenant's promise of the indwelling Spirit (Ezekiel 36:24-26; Jeremiah 31:31-33). The mystery aspect of the Church was that non-Jews would also receive the Spirit and be placed within the same body (with believing Jews) through the Spirit (Acts 10:45, 15:8; Ephesians 2:19-3:6). This was a mystery because the New Covenant and the advent of the Spirit had been promised only for the house of Israel and the house of Judah (Jeremiah 31:31), not for Gentiles. Thus, it was hidden in the Old Testament, sparingly, such as in the covenant given to Abraham, whose seed (Messiah) would be a blessing to all nations.
But the Church is not new. The Church is not new because it is simply remnant Israel. Some people claim that Paul's olive tree is the Church, others claim it is Israel. Seeing it as remnant Israel solves the dilemma. The olive tree is remnant Israel and it is the Church, because the Church is remnant Israel. Further support for this comes from Peter's speech in Acts 3. While speaking to Jewish non-believers, he stated that Jesus was a fulfillment of Mosaic prophecy:
For Moses said, "The Lord your God will raise up for you a prophet like me from among your own people; you must listen to everything he tells you. Anyone who does not listen to him will be completely cut off from among his people." (Acts 3:22-23; italics added)
When a Jewish person believed in Jesus and was born of the Spirit, he became a member of the Church, the Body of Christ. However, if a Jewish person did not believe in Jesus, he would be "cut off" (the same language used in Paul's olive tree illustration) from among the Jewish people. This shows that not only Paul, but Peter also, saw the Church as being equivalent to remnant Israel.
The fact that the Church is remnant Israel is evidenced by the name of the eternal home of believers (the New Jerusalem), by the gates of that home (the names of the twelve tribes of Israel), by the pillars of that home (the twelve Israelite apostles of Jesus), and by the Person seated on the throne of that home (Jesus, the King of Israel, Himself an Israelite).
Because the Church is remnant Israel, Paul--certainly a member of the Church--could say that since he was a believer in Jesus, he was part of remnant Israel (Romans 11:1-5). Because the Church is remnant Israel, Paul could say that Gentile believers in Jesus have been grafted into remnant Israel (Romans 11:17). Because the Church is remnant Israel, both Paul and Peter could say that Jews who didn't accept Jesus would be cut off from Israel (Romans 11:17; Acts 3:23). Because the Church is remnant Israel, Paul could say that Gentile believers are no longer "excluded from citizenship in Israel" and no longer "foreigners to the covenants of the promise" (Ephesians 2:12). Because the Church is remnant Israel, Paul could say that Gentile believers "are no longer foreigners and aliens, but fellow citizens with God's people and members of God's household" (Ephesians 2:19).
These truths would make no sense if the Church were a totally new enterprise, completely separate from or replacing remnant Israel.
Conclusion
For a long time there has been an improper distinction between Israel and the Church. This error has been happened for two reasons: (1) People have rightly noticed the Bible's distinction between Jew and Gentile, but then they erred in thinking that Israel equals Jew and Church equals Gentile. Both Israel and the Church contain both Jews and Gentiles, and the distinction between Jew and Gentile is not equivalent to a distinction between Israel and the Church.
(2) When speaking of the distinction between the Church and Israel, people have failed to make the necessary distinction between national Israel and remnant Israel. Remnant Israel is a spiritual body, national Israel is not.
Gentile believers are grafted into remnant Israel, whose holy root is the Messiah. Gentile believers have taken the place of Jews who have not believed, but Gentiles as a whole have not replaced Jews as a whole. Only part of Israel has been hardened (Romans 11:25). And God is able to graft Jews back into remnant Israel/the Church when they believe (Romans 11:23).
The proper understanding of Israel and the Church is not replacement theology nor separation theology. The Church has not replaced national Israel. National Israel never was a spiritual body of people, but merely a nation of saved and unsaved, like others nations. And God has a future program of prophecy to fulfill for that nation. Neither has the Church replaced remnant Israel. Paul considered himself part of remnant Israel (Romans 11:1-5), part of Christ (Romans 9:3), and part of the Church (Ephesians 5:29-30). This shows that the Church, the Body of Christ and remnant Israel are synonymous.
Therefore, the Church is not separate from remnant Israel. The Church is remnant Israel. Through faith in Christ, Gentile believers are no longer excluded from citizenship in Israel, nor from the covenants of the promise (Ephesians 2:12). They have been grafted into the Church, an olive tree natural to Jewish people but unnatural to Gentiles. It is for this reason that Paul exhorts his Gentile readership not to be arrogant about their membership within the Church (Romans 11:20).