Why were Israel told to repent and be baptized?
Israel was told to repent and be baptized in preparation for the coming of their King, so that they could become a nation of priests and take the knowledge of their God to the pagan Gentiles. This call was tied to recognizing that God had made Jesus both Lord and Christ, or Messiah.
Les explains that verse 38 is tied to verse 36. It was the people of Israel who were to understand that they needed to repent and be baptized. He asks when one first hears that kind of language—repent and be baptized—and answers that it is John the Baptist, whose ministry was only to the covenant people of Israel, not Gentiles. The reason was preparation for the coming of their King, so that they in turn could be a nation of priests to take the knowledge of their God to the pagan Gentiles. In verse 36, all the house of Israel was to know assuredly that God had made the same Jesus whom they crucified both Lord and Christ, that is, Messiah. Les notes this was only as yet for the nation of Israel, and people should push aside what does not belong and see what the book says.