What was the setting when God spoke to Moses in Exodus 19?
Israel had just come out of Egypt and was gathered around Mount Sinai. Moses was up in Mount Sinai, and God was speaking to him there. In that setting God gave the conditional statement of Exodus 19:5: if Israel would obey His voice and keep His covenant, they would be His peculiar treasure above all people.
Les explains that Exodus 19 comes after Israel has just come out of Egypt. They are gathered around Mount Sinai, Moses is up in the mountain, and God is speaking to him. The key statement is conditional because God does not take away the free will of men or nations: if they obey His voice and keep His covenant, then Israel will be a peculiar or particular treasure to Him above all people. God can say this because He is sovereign, and all the earth is His.