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Beginning in Romans 11:25, Paul enlarges upon God's purpose for blinding Israel to be sure that we understand it.
25 For I do not want you, brethren, to be uninformed of this mystery [secret, hidden truth],lest you be wise in your own estimation, that a partial hardening has happened to Israel until the fulness of the ethnos has come in; 26 and thus all Israel will be saved [Isaiah 45:25]; just as it is written, "The Deliverer will come from Zion, He will remove ungodliness from Jacob." 27 "And this is My covenant with them, when I take away their sins."
Paul refers to a combination of Scriptures from Isaiah 59:20, 21 and 27:9 to prove his assertion that "all Israel will be saved." Isaiah 59:20, 21 says,
20 And a Redeemer will come to Zion, and to those who turn from transgression in Jacob, declares the Lord. 21 And as for Me, this is My covenant with them," says the Lord: "My Spirit which is upon you, and My words which I have put in your mouth, shall not depart from your mouth, nor from the mouth of your offspring, nor from the mouth of your offspring's offspring," says the Lord, "from now and forever."
This is a reference to the New Covenant that was to be made with the house of Israel and the house of Judah. Because this Covenant is unconditional (unlike the Mosaic Covenant), it is a declaration of divine intent, not an offer conditioned upon "if" clauses. God fully intends to save all of them, not by justifying the ungodly, but by turning their hearts and giving them the faith necessary to be saved.
In Isaiah 27:8 and 9, which Paul references above, the prophet tells us how divine judgment itself is God's method of turning the hearts of the people.
8 Thou didst contend with them by banishing them, by driving them away. With His fierce wind He has expelled them on the day of the east wind. 9 Therefore, through this, Jacob's iniquity will be forgiven; and this will be the full price of the pardoning of his sin.
In other words, God banished and expelled the house of Israel, and this judgment "will be the full price of the pardoning of his sin." A few verses later (27:13) Isaiah identifies the Israelites in question as "those who were perishing in the land of Assyria." In other words, the prophecy was specifically addressed, not to the house of Judah, but to the house of Israel that had been deported to Assyria.
Even so, Paul's primary use of the term "Israel" was inclusive of all the tribes and so included the house of Judah as well. But it is significant that Paul did not say "all Jews will be saved," but rather "all Israel will be saved." He did not limit this salvation to only a few of the tribes. Like Isaiah, He was concerned with the greater bulk of Israelites who had become "lost sheep of the house of Israel."
The New Covenant was to be made with both Israel and Judah (Heb. 8:8), as well as all others who would attach themselves to that Covenant (Is. 56:6-8) to fulfill the prayer of Solomon (1 Kings 8:41-43, 60).
Paul reminds us also that it was God who had blinded the eyes of all the Israelites (other than the remnant of grace). He did this, not for an evil purpose, but for a greater good. The Old Covenant under Moses had to fail, in order to make room for the greater Covenant that was promised to Abraham and instituted fully through the work of Christ. The appearance of injustice is only temporary, caused by our lack of understanding of the big picture. The big picture is this: "All Israel will be saved."
Meanwhile, however, Paul had to deal with the blindness that God had imposed upon both Israel and Judah. So he says in Rom. 11:28,
28 From the standpoint of the gospel, they are enemies for your sake, but from the standpoint of God's choice, they are beloved for the sake of the fathers; 29 for the gifts and the callings of God are irrevocable.
This is often misunderstood, first because so many assume that the Jews are Israel. Such people do not understand the distinction between Israel and Judah, so they are unaware of the discussions in Paul's day about the ten tribes of Israel that had been scattered over 700 years earlier. So when Paul speaks of "Israel," many assume he is talking about the Jews, or perhaps those Jews who were living in other parts of the Roman Empire. Such people miss the whole point of Paul's discussion.
We only need to read the first-century Jewish historian, Josephus, was wrote the following about Israel and Judah:
"Wherefore there are but two tribes in Asia and Europe subject to the Romans; while the ten tribes are beyond Euphrates till now; and are an immense multitude, and not to be estimated by numbers." [Antiquities of the Jews, XI, v, 2]
Thus, modern Christians are often mistaken in thinking that Paul was focusing upon the salvation of world Jewry as distinct from non-Jewish ethnos. When Paul says that "a partial hardening has happened to Israel until the fulness of the ethnos has come in," he was NOT telling us that God hardened Jewish hearts until a certain complement of "gentiles" had come to believe in Jesus Christ.
Instead, Paul was telling us that God had hardened the hearts of both Israel and Judah until ALL THE NATIONS have come to the knowledge of Christ. Those nations are not merely "gentiles" as distinct from Israelites, but rather they literally include both Israel and Judah as nations.
Paul was referring to the promise to Abraham that his seed would bless all nations (Gen. 12:3). To Abraham himself, God promised, "I will make you a great NATION." The Hebrew word used is goy, which is the equivalent to the New Testament ethnos. Although both of these words are often applied to nations other than Israel or Judah, these words are also used of the "nation" of Israel and the "nation" of Judah. "Nation" is a neutral term and should not be translated "gentiles."
Hence, "the fulness of the ethnos" (Rom. 11:25) is actually a reference to Gen. 48:19, "a multitude of nations." It is the promise given to Ephraim, son of Joseph. The Hebrew word translated "multitude" is melo, which is defined as "fulness, that which fills."
http://www.blueletterbible.org/lang/lexicon/lexicon.cfm?Strongs=H4393&t=KJV
Paul, then, was referring to the promise to Ephraim, who was the inheritor of the Birthright. Jacob prophesied that he would become "a fulness of nations," or a fulness of ethnos. To Ephraim was given the name "Israel" (Gen. 48:16).
So Paul was telling us that God had blinded the eyes of Israel--represented by the tribe of Ephraim--until the promise should be fulfilled concerning Ephraim becoming "a fulness of nations." This multitude or fulness of nations are not "gentile" nations as distinct from Israel. Paul was referring specifically to the promise that Abraham would beget a multitude of nations.
We know that Paul understood that this promise to Abraham would include all the ethnos who were "children of Abraham" by faith (Gal. 3:26, 29). Thus, it certainly includes nations who have no direct genealogical connection to Abraham. But Paul was NOT saying that God had set aside Israel during a so-called "dispensation of grace" in order to allow "gentiles" to join the church.