The Jews in the Quran

In the Quran, the Jews are referred to as Bani Israel, a term which evokes a feeling of sadness whenever I hear somebody reading the Quran calling out "Ya Bani Israel". Its like a father calling out his long lost son to return home. Bani Israel used to be God's favorite at one time. They were the first people to accept monotheism. God honored them by giving Moses, their leader, the first revealation- The Torah. God told Bani Israel to take good care of the Holy Book failing which He would cease giving further guidance. Bani Israel however started doing mischief right from the start after escaping from Egypt in 1258 BC. When Moses was out on Mt.Sinai, they took to worshiping the golden calf.
God, however forgave them for this.

After the demise of Moses, Bani Israel became arrogant. They considered themselves "The chosen People" with special previlages. Heaven is exclusively created for them. Non Jews were excluded. They amended the Torah to their liking. Corruption set in one after another. More prophets were sent down to get Bani Israel on the right footing but they killed some of the prophets. Then Jesus came to revive whatever remained of the Torah. They rejected him and instead called him an illegitimate child.

Finally God sent Muhammad with the same mission as Jesus but Bani Israel refused to accept him because Muhammad was an Arab. Only somebody from Bani Israel was qualified for prophethood