El-Haj's "scholarly" work is premised on the idea that Jewish Israeli archeologists invented evidence of ancient Jewish settlement of the Land of Israel to justify Zionist claims to the land. Besides the issue of discrimination, which would be unthinkable in any other context related to any other group, the request to Segal seems like an implicit endorsement of her thesis, that Jewish archeologists cannot be trusted to be objective in their work related to Israel (which makes one wonder why the university would trust El-Haj, of Palestinian Arab origin, to be objective). Thanks to Solomania for the link.
UPDATE: It occurs to me that another possibility is that the powers-that-be don't anticipate granting El-Haj tenure, and they want non-Jewish critics so that they can better make their case that this was an objective decision, not one motivated by politics or pressure. If so, the university is merely (?) pandering to the prejudice that Jewish archeologists won't be objective, which I suppose is a bit lower on the outrageousness scale than actually being prejudiced, but still does not speak well of the requestors.
FURTHER UPDATE: Barnard denies the allegation. Well, sort of. Barnard spokesman Gildersleeve said that "the charge that restrictions were put on that request is absolutely untrue." Segal isn't claiming that he was restricted to non-Jews, just that they were preferable.