One New Covenant or Two?
In Jeremiah’s oracle the new covenant is to be made “with the house of Israel and with the house of Judah.” In the New Testament fulfillment it is not confined to them, but extends to all believers of every nation—and indeed, in the Old Testament itself indications are not lacking that it was to have this all-embracing character. Whether Jeremiah consciously envisaged the wider extension of the new covenant or not, its wider extension is really implicit in his prophecy: national origin and racial descent must also be included among those externalities from whose control true religion is released by the new covenant. “It is one thing to say that Jeremiah was not given to see what the new covenant would mean for the world, it is entirely another to say that by Israel and Judah he really meant the Church…On the other hand we must not fall into the opposite error of supposing that the new covenant will mean something else for ‘all Israel’ than it does for the Church, that saved Israel will be saved in some other way than is the Church. God does not abolish physical Israel, but in saving it transcend it, just as He does not scrap this earth but renews it.”
F.F. Bruce – The Epistle to the Hebrews
One interesting note, early dispensationalist used to argue that there are really two new covenants and the one to Israel does not apply to the Church, but this idea is foreign to the scriptures.