Jesus Creed

It is politically incorrect to say that the Church replaces Israel in the plan of God or to say that a supersessionism is at work in early Christian theology. Traditionally Christians have claimed both terms at some level. There are three basic views, so far as I can see — and there are all kinds of little nunaces among theologians. What is your view?
First, some believe in a two-covenant approach: one for Israel and one for the Church. Both Israel (contemporary, faithful Jews) and the Church (contemporary, faithful Christians) are the true people of God. Second, some believe in a one-covenant approach: the covenant God makes with Abraham/Israel/Moses and David unfolds into the New Covenant and now, and forever, that New Covenant it he basis for participation in the people of God. If you don’t accept Jesus into your heart you are out. Third, modifications of the second include a one-covenant approach that factors in a wideness in God’s mercy — God will see the heart of each person and will finally judge fairly.
It is pretty hard to square a two-covenant approach with Paul: he got into a mess of trouble, leading to his death, for preaching a gospel to both Jews and Gentiles and he summoned both groups into the Church. I don’t think this is disputable. It is also impossible for me to dismiss option three: I believe in a wideness in God’s mercy. CS Lewis: “We do know that no man can be saved except through Christ; we do not know that only those who know Him can be saved through Him” (Mere Christianity, p. 50).
I’m impressed by Acts 10:35, words attributed to Peter:

Then Peter began to speak to them: “I truly understand that God shows no partiality, 35 but in every nation anyone who fears him and does what is right is acceptable to him.

And it is impossible to deny that Peter himself assimilates the language of Israel for the Church, thereby seeing fulfillment in the Church — a fulfilment that means Israel is summoned to believe in Jesus Christ. Tell me how you see these words for 1 Peter 2:9-10 in light of the options above:

But you are a chosen race, a royal priesthood, a holy nation, God’s own people, in order that you may proclaim the mighty acts of him who called you out of darkness into his marvelous light.
10 Once you were not a people,
but now you are God’s people;
once you had not received mercy,
but now you have received mercy.

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