Israel, Jew
When we encounter terms such as “Israel” and “Jew,” we naturally give them corporeal definitions pertaining to one's nationality, birthplace, or native tongue. The Kabbalistic approach to these terms, however, is slightly different...
Israel is actually a combination of two words: Yashar (straight) and El (God).
So, to be an Israeli doesn't necessarily mean having an Israeli ID and living in the physical land of Israel. Rather, an Israeli is one with an attraction to the Creator—the Upper Force that encompasses and governs the whole of reality. An Israeli is one who wishes to acquire the Creator's quality of love and bestowal.
“…will crave to complete one’s soul and bring it back to its root, and this is discerned as “Israel.”
--Baal HaSulam, Pri Hacham (Fruit of a Sage), Letters, p.63
“And he is called Ysrael, by way of Yashar El (Straight to God)…”
--The Ramchal Commentary on Hagiographa, Proverbs
Jewish – In Hebrew, Yehudi (Jewish) originates from the word Yechudi, meaning "one," "united" or "unique." Thus, Jewish is one who achieves unity with the Creator.
“His name is Yehudi (Jewish)… since he has Yiched (united) the name of the Creator against all of humankind.”
--Midrash Raba, Esther, Parasha 6, Paragraph 2
“…who united his heart to one God and became a Jew.”
--Baal HaTurim about Exodus 18:9