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God told Abraham,
And I will bless them that bless thee, and curse him that curseth thee: and in thee shall all families of the earth be blessed. Genesis 12:3
This is a dual promise. For one thing, it is the foundation verse of why all people and nations should bless Israel. Abraham had a son Isaac. Isaac had a son named Jacob. Jacob had twelve sons from which came the nation of Israel. Jacob’s name was changed to Israel. So when it comes to what “bless them that bless thee” means, it ultimately means blessing and standing with the nation of Israel.
“In thee shall all the families of the earth be blessed.” This is prophetic regarding Jesus. Jesus brought salvation to the world. Jesus came as the seed of Abraham, his lineage can be traced back to Abraham. The redemptive work of Jesus Christ is the blessing that allows reconciliation with God. Jesus is the blessing that blesses the whole world.
But as many as received him, to them gave he power to become the sons of God, even to them that believe on his name: John 1:12