This site seems to do a good job of explanation of the church's position in layman's terms.
http://www.firstthings.com/article/2008/08/the-covenant-with-israel---42
"The people of the new covenant have a special spiritual bond with Abraham's stock, the council's Nostra Aetate insists. The Church gratefully recalls that she received the revelation of the Old Testament through the people of Israel. She is aware that, even though Jerusalem did not recognize the time of her visitation, and the Jews in large numbers have failed to accept the gospel, still, according to Paul, the Jews still remain most dear to God because of their fathers."
Nice try. Paul saying that “the Jews still remain most dear to God because of their fathers." Is not the same as the RCC position that Israel is no longer the “chosen” people of God”. I dare you to ask your priest if Israel is still the “chosen people of God” and that all covenants with them are still in affect. If he is honest about the RCC position he will admit that Israel as a people no longer hold that position but that the church does. BTW It’s not just the Catholic Church. It’s also most of the Protestant denomination that hold that position so if you think that was just against the Catholic Church guess again.