In God’s dealings with the nation of Israel there are two covenants (binding agreements) in play: the first is a conditional covenant made with Israel at Mount Sinai (Ga 4:24); the agreement is that if Israel will obey God’s Law He will bless them, otherwise He will curse them. (De 11:26-28)
The second (or new) covenant is an unconditional covenant God will eventually make with Israel: He will put His Laws into their minds write them in their hearts (He 8:10), be their God and accept them as His people, ensure they all know Him, and put away all of their sins. (11-12) He will give each of them a new nature which delights in His laws (Ro 7:22), redeeming and saving the entire nation. (Ro 11:26-27)
This first covenant with Israel is not a promise of salvation by works; it’s simply a promise given to Israel as a nation to bless them if they honor and follow God’s law to the best of their ability, evidently as a signal to the rest of us that there’s tremendous blessing in obeying God (Ps 1:2-3), and trouble if we don’t. (Ps 119:118) Israel has, of course, failed miserably to keep their end of the covenant and are being punished by God as a consequence.
The second covenant God will eventually make with Israel certainly is a promise of redemption and eternal salvation for Israel as a nation, but it’s incomplete and mysterious at present, how He will accomplish this and what it will look like.
In the interim, in between these two covenants, we’re left to work out an understanding of how we’re all to relate to God, for it’s through these two covenants God reveals His redemptive plan. (Ps 50:5) They hold within them the keys to having a relationship with God; in being estranged from them we have no hope, and are without God in the world. (Ep 2:11-12)
Yet these two covenants with Israel don’t comprise the whole picture: God makes a third covenant related to redemption, but this one is unique in that God makes it with Himself (Ga 3:20); this is a covenant between the Father and the Son (He 10:8-10): the Father gives the Son a group of people (the elect, or chosen) to redeem, and the Son redeems these people for the Father. (Jn 6:37) This covenant is flawlessly secure because both parties to the covenant are unfailingly perfect. (Ro 4:16) This divine agreement is actually the first covenant of the three, made in eternity past (Ep 1:4, 1Pe 1:19-20) and publicly formalized, revealed and confirmed in front of Abraham, well before Sinai. (Ga 3:17)
The eternal covenant between God the Father and God the Son is evidently related to the two covenants God makes with Israel in that God produces obedience to the Law in the hearts of His elect as required in the Sinai (first) covenant (De 5:29) by providing Himself as the new heart (Ez 36:26), the divine nature within the elect (Co 1:27) inclining us to obey (1Pe 1:2), as promised in the future New Covenant with Israel. (He 10:16-17) In this way, God unites us with Himself and His Law so we partake in both of these two covenants of promise He makes with Israel (1Ti 1:6), giving us hope of eternal life and fellowship in Him. (Ep 2:13-14)