There are several Arabs with Israeli citizenship, and there are even Arab members of the Knesset. In fact, when Israel conquered the West Bank, it offered Israeli citizenship to the Arabs living there, but most of them chose to retain their Jordanian citizenship.
Actually, there are more than one million Arabs with Israeli citizenship, but the report doesn't say they were citizens, but rather, Israeli nationals which would include anyone traveling under Israeli papers, and that could include a significant number of Palestinians from Gaza or the West Bank.
1.2 million Arabs is hardly "several".