From Ancient Israel by Harry M. Orlinsky
In this period [the first half of the second millennium] and area [the Fertile Crescent], the ethnic group from which the Hebrews of the Bible finally emerged took its place in documented history. The fragmentary data available seems to suggest that various nomadic groups, both Semitic and non-Semitic, but generally known as Habiru, began to appear about 2000 B.C. They wandered from one area to another, sometimes with their own flocks or as skilled craftsmen, smiths, musicians, and the like. At other times they hired themselves out for specific functions and periods of time, for example, as mercenaries and as private or government slaves. Not infrequently they made sudden raids on caravans and on weak, outlying communities, and according to their success either became prisoners of war and state slaves or settled down permanently in conquered towns and regions.
There appears to be good reason for associating the Biblical Hebrews with these far-flung Habiru. Not only does the Biblical account place the career of the Hebrews within the general orbit of the activities of some of the Habiru groups in the different lands of the Near East and in the different epochs of the second millennium, those of the Habiru groups which had conquered and become associated with specific territories acquired new, national names, e.g., Moabites, Ammonites, Edomites; the rest of the Habiru had become absorbed by the various settled communities in which they found themselves.
The story of the name "Hebrews" is much the same. Originally associated with some of these widely scattered Habiru groups, the Hebrews of the Bible came in time to lead a career of their own in a specific region, namely Canaan; and the name Hebrews gave way to the name Israelites (literally, "Children of Israel") when the nation came into being. Thus the Biblical term Hebrew was never employed for the nation any more than the term Habiru was.
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