Sefat's Sefardic chief rabbi Shmuel Eliyahu, son of former Sefardic chief rabbi of Israel Mordechai Eliyahu, made a plea bargin with the state to avoid trial on incitement to racism charges. According to Ha'aretz, Rabbi Eliyahu will:
[M]ake a public announcement refuting a number of previous slanderous statements made against Israeli Arabs.
"The aim [of the plea bargain] was to improve relations instead of carrying out a criminal trial which would have polarized the two sides," Eliyahu's lawyer Yael Grossman said.
Maybe. The real aim of the deal seems to be keeping Rabbi Eliyahu out of jail and retaining his rabbinic post, which he would have lost if convicted. The state gets to avoid sending a rabbi to jail and further upsetting Israel's settlers.
But the deal is not win-win for both sides. The state will eventually have to crack down on anti-democracy rabbis. Better that should be done now, rather than later under duress.