If G-d knows the future how can we have free will?
The answer, I think, is that the dimension of time is a creation just like space. This has been proven scientifically. We think in terms of time because we are bound by it. Trying to imagine a world without time would be like describing colors to a blind person. Impossible. But G-d is outside of time and therefore for Him everything is happening all at once. Therefore, as far as He is concerned, the world was created for the Jews (because they accepted the Torah) and the non Jews still had the option, because it all was at the same time. Another answer is that even if the non Jews accepted the Torah, the Jews could have joined them in accepting the Torah as well. So both could have been chosen, so to speak.
Rabbi Meir Goldberg