Why is the story of Ishmael introduced between the two covenants? Because any nation can survive on their land, even Ishmael. The distinguishing characteristic between Ishmael and Isaac is in their ability to maintain their uniqueness when they are removed from their land. Hashem says that He will transfer the covenant and its fulfillment to Isaac and not Ishmael, because Isaac and his descendants will remain unique and committed to the land forever, even in exile.
Hashem retains responsibility to recognize and fulfill the Bris Bein Habesarim so that the land maintains its loyalty to the people. However, we must fulfill the covenant of Milah and retain our uniqueness and identity as Am Hashem. Perhaps this explains the recent unprecedented phenomenon of Jews attacking Israel for defending her land and people. They have lost their connection to the covenant of Bris Milah that obligates us to yearn for Eretz Yisrael, sacrifice for her as she does for us. We pray that Hashem maintains His covenant, that the land will always yearn for us.