By Crispian Balmer and Rami Amichay JERUSALEM (Reuters) – Tens of thousands of flag-waving Israeli nationalists, some chanting “Death to Arabs”, marched through the Muslim quarter of Jerusalem’s Old City on Sunday, defying threats of retaliation from Palestinian militants. The annual parade celebrates Israel’s capture of Jerusalem in the 1967 Middle East war, but has increasingly become a show of strength for Jewish nationalists eager to extend their influence in a city which has a large Palestinian population. Many marchers sang and danced as they wound their way through the narrow, stone str…