In this very well written, readable and thoroughly Christian book, David Holwerda gives, in this reviewer's opinion, the right answer to the question posed in the title. He clearly shows that there is only one covenant and that is found in the person and work of Christ. The book, in part, is then a response to (a) dispensationalist theology which denies that the church  is the Israel of God, and holds to two quite separate purposes for the church and Israel and (b) certain liberal theologies which see Judaism as a valid response to God without the need, at present, for Jesus. Nevertheless although Holwerda clearly rejects a two covenant theology he does argue from Romans 11 that `Jewish Israel' still has a place in God's final purposes. However although he believes that the restoration of the Jews to the Promised Land in the twentieth  century is a good thing and is even used by God he rejects the belief that this is a fulfilment of prophecy with theological implications.

His first chapter is a very helpful discussion of many and various attitudes that  the church has had to Israel. So we get a useful summary of Justin Martyr's, Luther's Calvin's, as well as Barthian and liberal Protestant convictions about Israel.

By far the largest part of the book is an excellent study of the relationship of Jesus to Israel dealing with the questions of `Identity', `the Temple', `Land', and `Fulfilment'. He skilfully and movingly shows us, through illuminating Biblical exposition, that Jesus is Israel and Israel is Jesus who gathers up in Himself Israel's destiny. Preachers who want to show how the Old and New Testaments bear witness to one another as they bear witness to Jesus will find much to help them in these main central chapters of the book. Readers who believe in the essential unity of the Word of God will find much to strengthen and deepen their conviction.

Superficially this position would lead to the conclusion that Jewish Israel has no further unique place in God's purposes. However, Holwerda's fine exposition of Romans 11 will not allow him to reach this conclusion. He points out that the seeming final judgement on unbelieving Israel in the Gospels and Acts is only a judgement on that present generation. He notes that there may be hints in the gospels of a final restoration of Jewish Israel (e.g. Luke 21:20-24), but Romans is the only N.T. book that deals theologically with the future of Jewish Israel.

However in spite of my high opinion of this book I wonder whether Holwerda has really thought out the eschatological implication of his `Jesus is Israel' theology. For if the death of Jesus means the death of Jewish Israel, will not the resurrection of Jesus guarantee the resurrection of the people who died? That resurrection cannot merely be the New Israel, because in the prophets it is the very people who are judged that are finally restored. God cannot let them go because in His predestinating will they were disobedient so that the world might be saved through the cross of Jesus. They were disobedient for our sake and this was God's purpose of mercy for Jew and Gentile alike. Surely it is the very incarnation and atonement in God's eternal purposes that lie behind Paul's theology in Romans 9-11. Further, since the whole of Scripture teaches us that nature as well as humankind is the creation of God and the object of redemption, it seems clear to this reviewer that if we grant that this representative people still have a unique destiny to fulfil this cannot finally be separated from that land that represents all lands in God's purposes. 
(For my view of the current peace process in the Middle East click here.)
In short, just because the final fulfilment of prophecy in Jesus has a universal fulfilment in all the earth,  that does not mean that particular fulfilment in one people and one land has lost its place in God's purpose. 

This does not mean that there are two covenants, for both the destiny of New Israel and that of Jewish Israel cannot be understood apart from that one incarnation and atonement accomplished in Christ. As the new Israel bears conscious witness to the death and resurrection of Jesus so Jewish Israel bears unconscious witness to the same Jesus in its long and mysterious story.

I certainly recommend this book, most of all because of its profound Biblical insights into Israel's destiny as found in Christ alone. Whether the author has fully drawn out the eschatological implications of the relationship between the particular fulfilments of prophecy in a continuing Jewish Israel and the universal fulfilments in the whole earth I am not so confident.