To oppose Jewish nationalism, even in speech, and to denigrate its values is not permissible, for the spirit of God and the spirit of Israel are identical. What [men of faith] must do is to work all the harder at the task of uncovering the light and holiness implicit in our national spirit, the divine element which is its core. The secularists will thus be constrained to realize that they are immersed and rooted in the life of God and bathed in the radiant sanctity that comes from above. -Rabbi Abraham Isaac Kook, first Ashkenazic chief rabbi of Israel, Lights for Rebirth.
Under Ottoman rule, religious communities had a high degree of autonomy, being allowed to take responsibility for matters of personal status, to operate their own courts and schools, etc. In the case of the Jews in Palestine, this meant that a number of different ethnic subcommunities existed side by side. After 1918, the British were basically content to maintain this status quo: there would be a more rational and modern central government than the Ottoman empire had provided, but autonomous religious communities would continue to be granted the authority to take care of their own internal matters. This was more than acceptable to the Old Yishuv , the various ethnic orthodox communities that had been living in Safed, Hebron, Tiberias, and Jerusalem throughout the Ottoman period.
However, as the New Yishuv the Zionist community grew, there was a rising demand for some kind of modern, democratic, autonomous government within the framework of the British Mandate. This demand created tension, as the British and the Jews of the Old Yishuv preferred to see the Jewish entity in Palestine as a religious community (or as several religious communities), while the New Yishuv was building according to a vision of a secular, national entity. Thus, the Zionists had to find a way to fold their national aspirations into the framework of a religious community in the Ottoman tradition, which the British refused to relinquish. They had no choice but to agree to the Mandatory legislation (in 1927) that defined the Jewish communal organization in Palestine as a religious community, even though the autonomy that the Jews set up was seen by them as the preparatory apparatus to the establishment of a secular nation state. This compromise meant that the specifically religious aspects of Jewish life, e.g., rabbinical courts, marriage and divorce, inheritance, and kashrut supervision - were part of the legal structure of the autonomy. In the state-in-formation that was called Knesset Yisrael (the assembly of Israel), religion and state were one and the same. Rabbis were public employees. Religious services like kashrut supervision were funded by taxes. The majority of the Zionists were secular and even socialist, and were definitely not in favor of this arrangement. However, it was clear that without this compromise, this legal fiction that the Jews of Palestine were a traditional Jewish community, we would get no autonomy at all.
An entire governmental rabbinic bureaucracy was established, with Ashkenazic and Sefardic chief rabbis, a hierarchy of local and national rabbinical courts, kashrut supervision, etc. (Meanwhile, of course, the Old Yishuv demanded the right to remain outside of Knesset Yisrael , because they wanted no part of Zionist autonomy, secular or religious, and saw no reason to change the arrangement that had obtained under Ottoman rule.)
This unfortunate mixing up of state and community explains why we are in the predicament we are in today; for just as the British held on to key elements of the Ottoman system, we kept the Mandate system in place even after we had achieved an independent state. As state functionaries, with state powers, the rabbis of the rabbinical establishment have fallen into the trap of trying to make Jewish law state law in a state that declares itself to be democratic. Needless to say, the results are far from the vision set forth so forcefully and eloquently by their master and teacher, Rabbi Kook.