There’s more than 2 ways to get Israeli citizenship.
Both of those fall under the “right of return” for Jews.
Non-Jews with permanent residency can become citizens after 3 years if they give up their previous citizenship. Meanwhile, Jews are allowed to be dual citizens. For example, some Druze in the Golan Heights became Israeli citizens that way, particularly due to the Syrian Civil War.
Also, in 1952, Israel passed a citizenship law that gave citizenship to anyone who had been a national of the British mandate in 1948, had registered as an Israeli resident in 1949, and hadn’t left Israel before claiming citizenship. So about 170k Arabs were granted citizenship, while the ~720k who fled or were expelled during the war were excluded, although they expanded eligibility a bit in 1980 to include Arabs who had returned to Israel after the war.