Yes but God also created the people of Israel, of which Ishmael was originally a part.
Genesis 12:1 Now the Lord had said unto Abram, Get thee out of thy country, and from thy kindred, and from thy father's house, unto a land that I will shew thee:2 And I will make of thee a great people,
Abram becomes a great people, i.e. Israel. God then makes circumcision the mark of an Israelite, and anybody who did not get circumcised was kicked out of Israel.
17:14 And the uncircumcised man child whose flesh of his foreskin is not circumcised, that soul shall be cut off from his people; he hath broken my covenant.
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Genesis 17:23
And Abraham took Ishmael his son, and all that were born in his house, and all that were bought with his money, every male among the men of Abraham's house; and circumcised the flesh of their foreskin in the selfsame day, as God had said unto him.
Ishmael was circumcised; ergo he was part of Israel. It was only later he was ejected from Israel.