Influence on Jewish Zionism
On its publication, Daniel Deronda was immediately translated into German and Dutch and was given an enthusiastic extended review by the Austrian Zionist rabbi and scholar David Kaufmann. Further translations soon followed into French (1882), Italian (1883), Hebrew (1893), Yiddish (1900s) and Russian (1902).
Written during a time when Restorationism (similar to 20th century Christian Zionism) had a strong following, Eliot's novel had a positive influence on later Jewish Zionism. It has been cited by Henrietta Szold, Eliezer Ben-Yehuda, and Emma Lazarus as having been influential in their decision to become Zionists.
The depiction of Jews contrasted strongly with those in other novels such as Dickens' Oliver Twist and Trollope's The Way We Live Now. In spite of there having been a Jewish-born Prime Minister for many years (Benjamin Disraeli was baptised as a boy), the view of the Jews among the British at the time was often prejudiced, sometimes to the point of derision or revulsion, which is reflected in opinions expressed by several of the British characters in one scene in the book.
In 1948, F. R. Leavis in The Great Tradition gave the opinion that the Jewish sections of the book were its weakest, and that a truncated version called Gwendolen Harleth should be printed on its own. Conversely, some Zionist commentators have advocated the opposite truncation, keeping the Jewish section, with Gwendolen's story omitted.
Edward Said argues that the novel is a propaganda tool to encourage British patriation of Palestine to Jews  when in fact it was written decades before the British mandate over Palestine. At that time the Ottoman empire who dominated the area had little interest in it, Jews were already living in the area and the Arab Palestinian national identity was yet to be established.
Kabbalah in the novel
A major influence on the novel is the Jewish mystical tradition known as Kabbalah, which is directly referred to in the text. Mordecai describes himself as the reincarnation of Jewish mystics of Spain and Europe and believes his vision to be the fulfilment of an ancient yearning of the Jewish people. Many of the encounters between Mordecai and Deronda are described in quasi-mystical terms (for example, Mordecai's meeting with Deronda on the River Thames).
Daniel Deronda is full of references to spiritual, archetypal, and mythological imagery, from the Kabbalism of Mordecai to the encounter of Lydia Glasher with Gwendolen among a group of standing stones and Gwendolen's reaction to the image of a dying man.