They profile (in every sense of the word) and then search with varying intensity. If they don't find anything that can be used to hijack the plane, or to blow it up, they let you on. They don't ground people for 'bad intent'.
I'm not arguing about them profiling (they do) but I fly in/out of TLV numerous times a year, and many times, I'm with other, quite clearly Arabs. Many (most really) of them do not go through a much more stringent security than I do. They got more questioning, but this is questioning while they're anyways on line, waiting to check bags. The actual hand bag check is the exact same for them and for me.