Frankly, if I ran the place, I'd create 20 electoral districts, each of which would elect a single member via FPTP, and be unassociated with the 100 proportional members. The idea being that it would bolster any parties that can win over a national audience.
20 FPTP and 100 national PR? That wouldn't change the Israeli party system at all.
Do 60/60 or something, and it would make a difference.
Or, well, just a treshold. And there are ways to ensure Arab representation even if non of their list gets over 5%.