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To a great extent the Mizrahim identity is a recent catchall constructed to identify a real dividing line between those groups which are the products of the Sephardic-indigenous synthesis, such as the Moroccan Jews, and those which are not, such as the Yemeni Jews.Often all non-Ashkenazi Jews are referred to as Sephardic because of a common religious liturgy which binds them. Between the rise of Islam and Christianity as the dominant religious civilizations in which Jews were embedded and the Enlightenment Rabbinical Judaism had established a .In regards to the second I will note that the American Reform movement has pulled back from its more aggressive accommodations with the sensibilities of gentiles.
Though it seems likely that in the first millennium their ancestors were to be found along the Rhine, more recently their center of gravity has been in Central & Eastern Europe, in particular Poland and Lithuania.
The Sephardim were originally the Jews of Spain, but after their expulsion in 1492 they settled in the Ottoman Empire, and to a lesser extent in other regions of Europe such as the Netherlands.
They were not citizens with rights and responsibilities.
Over the past few centuries that has obviously changed.
Ironically assimilated European Jews themselves internalized this sense of their racial/national distinctiveness, evident even in those with no religious aspect of Jewish identity at all such as Sigmund Freud.
This explains the secular nature of the original Zionist project, whose aim was to create a national homeland for the Jews as a people, and so normalize them as a nation among nations, rather than being among the nations (this was a project which religious and assimilationist Jews initially opposed).
With the Holocaust, and the post-World War II rejection of racial nationhood, the often pseudo-scientific practice of measuring and categorizing people according to skull metrics, and more legitimately blood groups, fell into disrepute.
Some scholars began to reconfigure the Jews not as a biological descent group, but as a religious ideology or confession which eventually became an ethnic identity.
Jews were a corporate entity, a minority subordinate to the majority, whose relationship with the majority was mediated through eminent individuals who spoke for and had power over the community.
Though often fraught in the execution in the abstract the position of Jews within pre-modern political units was not controversial; Jews were subjects with obligations, often a useful minority for potentates.
In other words, the Jewish people and the seeds of the Jewish Diaspora were shaped by developments within and without the Jewish culture, and these developments left an impact on the genes of the Jewish people.