Franco has been right not to enter the second world war. In 1940, the civil war was not over yet in Spain. Yes, Franquist side had won, but they hadn't still cleansed the opposition within the folk.
That said, don't forget that Franco sent 20.000 Spanish volunteers to the the Eastern Front (against Soviets) and after the German defeat, many Nazi members (like the Belgian Degrelle) found refuge in Spain.
In 1940, when Heinrich Himmler visited Spain to ask Franco support, he reported that daily 300 to 400 people were killed in the streets by Falangist and Carlist militia's. In Spain the Franco rule had not been rooted yet by 1940 because most of the population was actually Leftist back then. So, it's comprehensible, I would say, the non-interference policy of Franco to WW2.
From what I know, Franco was not a Jew; he was Roman Catholic.