What made Israel distinctive as a people?

Israel's distinctiveness came from being a special, called-out, separated covenant people of God. From the promise to Abraham until their dispersion after rejecting their king, they were constantly taught this identity, and all their promises were earthly, so they are called God's earthly people.

Les explains that God separated Abraham from Ur of the Chaldees and from the mainstream of humanity, promising that from that one man would come a distinctive race and nation, Israel. What made them distinctive was that from the very onset of the promise to Abraham until they were dispersed after rejecting their king, Israel was constantly taught they were a special, called-out, separated, covenant people of God. All their promises were earthly, so they are called God's earthly people. Les clarifies that even in resurrection they will be an earthly people, not a heavenly people; Old Testament saints went to paradise, but Israel's promises remained earthly, which explains their great wealth.

Genesis 12:1

Now the LORD had said unto Abram, Get thee out of thy country, and from thy kindred, and from thy father’s house, unto a land that I will shew thee:

How did Abraham become the father of the nation of Israel as a new race out of the mainstream of humanity?

God singled Abraham out in Ur of the Chaldees, gave him the covenant, and brought him out of the mainstream of humanity. Through Abraham, Isaac, and Jacob, God formed a separated race—the nation of Israel—no longer counted among the Gentile families. That distinctive call made Abraham the father of this new nation.