Yes, it can be. It is rarely used in the Bible to refer to Israel, but it is occasionally seen. You can sometimes find the word גוי - goi, meaning nation or people, referring to the children of Israel in positive contexts as well as in negative ones. For example in the following locations: Joshua 3:17 And the priests that bare the ark of the covenant of the LORD stood firm on dry ground in the midst of Jordan, and all the Israelites passed over on dry ground, until all the PEOPLE were passed clean over Jordan. יהושע פרק ג יז וַיַּעַמְדוּ הַכֹּהֲנִים נֹשְׂאֵי הָאָרוֹן בְּרִית-יְהוָה בֶּחָרָבָה בְּתוֹךְ הַיַּרְדֵּן הָכֵן וְכָל-יִשְׂרָאֵל עֹבְרִים בֶּחָרָבָה עַד אֲשֶׁר-תַּמּוּ כָּל-הַגּוֹי לַעֲבֹר אֶת-הַיַּרְדֵּן Isaiah 1:4 3 The ox knoweth his owner, and the ass his master's crib: but Israel doth not know, my people doth not consider. 4 Ah sinful NATION, a people laden with iniquity, a seed of evildoers, children that are corrupters: they have forsaken the LORD, they have provoked the Holy One of Israel unto anger, they are gone away backward. ישעיהו א ג יָדַע שׁוֹר קֹנֵהוּ וַחֲמוֹר אֵבוּס בְּעָלָיו יִשְׂרָאֵל לֹא יָדַע עַמִּי לֹא הִתְבּוֹנָן. ד הוֹי גּוֹי חֹטֵא עַם כֶּבֶד עָו‍ֹן זֶרַע מְרֵעִים בָּנִים מַשְׁחִיתִים עָזְבוּ אֶת-יְהוָה נִאֲצוּ אֶת-קְדוֹשׁ יִשְׂרָאֵל נָזֹרוּ אָחוֹר

Joshua 5:6 6 For the children of Israel walked forty years in the wilderness, till all the PEOPLE that were men of war, which came out of Egypt, were consumed, because they obeyed not the voice of the LORD: unto whom the LORD sware that he would not show them the land, which the LORD sware unto their fathers that he would give us, a land that floweth with milk and honey. יהושע פרק ה ו כִּי אַרְבָּעִים שָׁנָה הָלְכוּ בְנֵי-יִשְׂרָאֵל בַּמִּדְבָּר עַד-תֹּם כָּל-הַגּוֹי אַנְשֵׁי הַמִּלְחָמָה הַיֹּצְאִים מִמִּצְרַיִם אֲשֶׁר לֹא-שָׁמְעוּ בְּקוֹל יְהוָה: אֲשֶׁר נִשְׁבַּע יְהוָה לָהֶם, לְבִלְתִּי הַרְאוֹתָם אֶת-הָאָרֶץ אֲשֶׁר נִשְׁבַּע יְהוָה לַאֲבוֹתָם לָתֶת לָנוּ אֶרֶץ זָבַת חָלָב וּדְבָשׁ Joshua 5:8 8 And it came to pass, when they had done circumcising all the PEOPLE, that they abode in their places in the camp, till they were whole. יהושע פרק ה ח וַיְהִי כַּאֲשֶׁר-תַּמּוּ כָל-הַגּוֹי לְהִמּוֹל וַיֵּשְׁבוּ תַחְתָּם בַּמַּחֲנֶה עַד חֲיוֹתָם

Here is another beautiful verse that I came across today, using the word goy for Israel: Exodus 19 6 And ye shall be unto me a kingdom of priests, and an holy NATION. שמות פרק יט ו וְאַתֶּם תִּהְיוּ-לִי מַמְלֶכֶת כֹּהֲנִים וְגוֹי קָדוֹשׁ This clearly shows that God's original intentions with the word goy were not to insult people. People who use that word like that do not understand the God of Israel, nor His holy word. Leviticus 19 33 And if a stranger sojourn with thee in your land, ye shall not vex him. 34 But the stranger that dwelleth with you shall be unto you as one born among you, and thou shalt love him as thyself; for ye were strangers in the land of Egypt: I am the LORD your God. ויקרא פרק יט לג וְכִי-יָגוּר אִתְּךָ גֵּר בְּאַרְצְכֶם לֹא תוֹנוּ, אֹתוֹ. לד כְּאֶזְרָח מִכֶּם יִהְיֶה לָכֶם הַגֵּר הַגָּר אִתְּכֶם אָהַבְתָּ לוֹ כָּמוֹךָ כִּי-גֵרִים הֱיִיתֶם, בְּאֶרֶץ מִצְרָיִם: אֲנִי יְהוָה אֱלֹהֵיכֶם Note: This is for friends, lovers of Israel, not for enemies. God commanded to remove the enemies from the midst.

"Goy" is not a slur against non-Jews, its meaning is neutral.

'goy' is sometimes used to refer to Israelites, *not* Jewish Israelis. Jewish Israelis is a modern term, and in modern contexts, 'goy' is never used to refer to Jews, and is actually a slur against non-Jews.