The Committee of Heads of Universities in Israel has sent a sharp letter to Minister of Defense Barak disputing a document put out by his ministry specifying the conditions in which Palestinian students may study in Israel. (The article is in Hebrew. Here is a PDF of the letter itself). The need for the limitations arose after the court struck down a more general decree forbidding Palestinians to study at Israeli universities; the court put academic freedom above security considerations. (Can Iranian and North Korean students freely study at American universities? I have no idea).
The heads of the universities are supported by the Minister of Education, so the argument is between two government ministries; actually, given the hierarchy of government ministries, the argument is between minister number 1 from Labor vs. minister number 2 from Labor.
The issues a society argues over can tell you a lot about the larger picture. In this case, for example, note that the Palestinian students under discussion are not Israeli citizens who happen to be Arabs: those can study whatever they want, obviously, if their grades are good enough. The question is if Israeli universities must offer training to Palestinians who are effectively at war with us, in fields that will give them improved tools to damage us; and the second question, irrespective of the field of study, is if Palestinians who otherwise would not be allowed into Israel, must be let in merely because they've managed to be accepted to a university.
I'm not certain which side of this argument I'm on. Somewhere in the middle, probably: there certainly need to be categories and limitations: studying at an Israeli university isn't a fundamental human right (Someone very close to me was recently rejected); on the other hand, ensuring that our security fellows don't go overboard is a reasonable demand.