A none-too-close reading of Torah (a.k.a. the first five books of "The Old Testament") will show the Jews believed then as much as now that God is universal. You also have made the common misinterpretation of the concept of 'chosen' as it refers to the Jews. It bears no relation at all to the 'Elect' of Calvinist Protestant Christianity, and does not imply a 'teacher's pet' relationship with God. We were chosen to perform an onerous task: not merely to preserve but to promulgate the Law to all peoples - another example of universality.

Certain chapters of Deuteronomy appear to support your thesis (as I understand it); therein, God commanded the Hebrews not merely to invade Canaan but to carry out what we would call 'war crimes' now, in the cause of monotheism vs idolatry. Thoughtful modern Jews find those passages disturbing, too. I will point out, however, that Deuteronomy was convenienently 'discovered' in the recesses of the First Temple, many generations after Moses and even a few after David... A questioner could easily read it as 'revisionist history', providing both 'backstory' and justification for what the Hebrews eventualy did while establishing their two kingdoms, but written in the future tense to appear as having been uttered beforehand (Hint: notice how many times the establishment of a center of worship is referred to without naming Jerusalem itself). Recall that, until the Exodus, Judaism was a religion of nomads, goatherds and 'stateless' people in exile or captivity. The priesthood and the rituals - what one might be tempted to call the Cult of the Ark - began after the Law was recieved on Mt. Sinai (or Horeb, depending on which passage you're reading),

Tom has a firm grasp on the central issue: the manipulation of power. There is a fundamental (no pun intended) difference between faith and religion, and it is manifested most clearly whenever a priesthood interposes itself between Believers and Believed. Owing to human yearning for an understanding of purpose in the workings of the world, there is no stronger psychological force for manipulation than ritualizing faith, whether in one god or many. Priests (used in the generic sense) have always been stronger than kings, in the long run - empires come and go, but man's need to believe remains constant.

Someone with more faith than I in the idea that God intervenes in the affairs of men might believe that the destruction of the Second Temple, and with it the presthood, redeemed Judaism by returning it to a religion of nomads and exiles. Come to think of it: someone else was saying, back then, that the Roman Empire was God's way of telling the Jews to get back their roots.... now, what was that guy's name?