While The Book of Daniel 11:15 is the only verse in the King James Bible to actually contain the words “chosen people” (only So the king of the north shall come, and cast up a mount, and take the most fenced cities: and the arms of the south shall not withstand, neither his chosen people, neither shall there be any strength to withstand) it is common to refer to the Israelites as God’s chosen tribe.
Of course, there are plenty of places where those exact words are not used, in that particular order. Like in Isaiah 45:20, or in Deuteronomy 14:2, for thou art an holy people unto the LORD thy God, and the LORD hath chosen thee to be a peculiar people unto himself, above all the nations that are upon the earth.
Exodus 19:5 also carries the decree when it is written that if ye will obey my voice indeed, and keep my covenant, then ye shall be a peculiar treasure unto me above all people: for all the earth is mine: And ye shall be unto me a kingdom of priests, and an holy nation.
In Amos, it is written that God said only the children of Israel has he known of all the families of the earth: therefore I will punish you for all your iniquities.
But all of this can be traced back to Genesis 15:18, when the lord makes a covenant with Abram (later called Abraham). In the same day the LORD made a covenant with Abram, saying, Unto thy seed have I given this land, from the river of Egypt unto the great river, the river Euphrates: The Kenites, and the Kenizzites, and the Kadmonites, And the Hittites, and the Perizzites, and the Rephaims, And the Amorites, and the Canaanites, and the Girgashites, and the Jebusites.
While plenty of debate has swirled over whether or not this idea (or indeed any part of the bible) is meant to be taken literally, the debate can be said to have gone off track a bit. After all, according to the text, God made a covenant with Abraham, well before they were trapped as slaves in Egypt. Therefore it is claimed that the land was theirs from this point, and that while they were in Egypt, other tribes took over what was rightfully theirs.
And yet others claim that these Israelites weren’t special in nature, despite the idea that they are chosen and therefore favored by God. It is argued that God was showing mankind what he could do with one set of people. So under this interpretation, they aren’t “favorites with advantages”, per se, but rather examples of God’s work.