Then the Lord passed by in front of him and proclaimed, “The Lord, the Lord God, compassionate and gracious, slow to anger, and abounding in lovingkindness and truth; who keeps lovingkindness for thousands, who forgives iniquity, transgression and sin; yet He will by no means leave the guilty unpunished, visiting the iniquity of fathers on the children and on the grandchildren to the third and fourth generations.”4
The Lord God showed amazing compassion and graciousness to Israel. He demonstrated his slowness to anger and his steadfast love for Israel despite the constant sins that they committed againts the Lord and everyone of His promises came true. However, though God is committed to steadfast love and He is slow to anger. What happened to Israel demonstrates that He will not leave the guilty unpunished and the children suffer for many generations because of the sins of the parents.
Israel was always disobedient to the Law of the Lord from Exodus to this point in their history. However, they had something that the gentiles did not have, they possessed the oracles of God, which refers to the Word of God.5
4 Exodus 34:6-7 (NASB).
5 cf. Romans 3:1-2.