Many Roman Catholics and many Jews believe The Bible is an allegory.
Few believe the entire Bible is an allegory. It's one bound book made up of many stories, writings, letter, etc from many writers. There are poems, there are allegorical stories, there are narrative and historical texts, there are proverbs, there are letters. I have a hard time believing anyone reads an extended genealogy and thinks it's meant to be an allegory. Then again, I have a hard time believing anyone reads the entire Bible and assumes something like Song of Solomon or Revelation to be literal, but people do.
Sorry for the string of quotes, but I hope to offer a little clarity to these statements. Where I think rj is getting confused with more prominent understandings of Scripture (not meaning to discount any personal interactions with Catholics who view all of Scripture as allegory) is surrounding the dominant mode of exegeting Scripture that existed from the Middle Ages through the Reformation (and lingered beyond). Medieval scholars read all Scripture through 4 lenses, maintaining that each passage would carry each sense of meaning: Literal, Allagorical, Analogical, and Anagogical.
Literal (and here is where there is some confusion between modern literalist readers and the reformers) meant the meaning of a passage to its first intended audience (how that writer of the passage intended it to be read) - not that things that were originally metaphor or symbolic should be taken literally. Thus, there is a good bit of symbolism, parable, and metaphor in Scripture, but at the same time, it is not wholly so.
Allagorical- from at least Origen, many used this as the primary mode of interpretation, that the true meaning of the passage is hidden in surface text, treating all of Scripture similar to a parable
Anagogical - the "spiritual" sense of Scripture. How all events in Scripture point toward its eternal significance
Analogical - the "moral" interpretation of Scripture - how each passage informs our ethic.
I think dividing interpretation into this spheres and imposing it on the text is flawed, but it has persisted for centuries. One major flow is that it takes the inherent Jewish-narratival out of the equation and i believe that Scripture can best be understood within the narrative framework.
But to the point here - I think there is some confusion about Catholics reading Scripture in the Allagorical sense and taking all Scripture allogorically.
For those interested, an amazing resource that isn't too long and pretty accessible that covers the history of interpretation, how the church has read Scripture and what is meant by word of God and its authority is "Scripture and the Authority of God" by N. T. Wright.
