James,
Well first and foremost, the Jewish people have unique relationship with God that other non-Christians don't have. They have the Old Covenant, which like all Covenants, is unbreakable.
St. Paul addresses this in Romans when, talking about Israel and Jews, he wrote that the gifts and callings of God are irrevocable. (Romans 11:29) The Old Covenant is a preparation for the New Covenant so as Jews continue to follow the Old Covenant, they continue to be prepared for the New One.
Now all Salvation, as we know, comes in and through the Incarnation, in the Person of Jesus Christ and His Atoning Sacrifice. It is always by grace and never through human works. That said, any man that responds to the grace and knowledge of God, understands that they can't earn their way to salvation but need His Mercy and in doing so can be saved.
We also know that the way to achieve a moral assurance of this salvation is through Baptism and being a faithful Catholic, all by God's grace . . . and so we preach the Gospel though God is not limited to the limitations He puts on us.
Returning to the Pope's statement . . . the context of his statement was while the Jewish people were observing Yom Kippur — the day of atonement — the day in which Jews ask for God's Mercy.
John
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