So, because Arabs in Israel have more rights than in neighboring countries, is a good enough excuse to treat them as second-rate citizen? Moreover, Israel isn't a complete democracy. No self-respecting democracy would force people to marry religiously (civil marriages aren't recognized in Israel, which results in direct discrimination against couples who weren't married according to Jewish religious rituals), nor impose sex-segregated bus-lines (women in the back of the bus, men in the front), nor persecute journalists who aren't in line with the government's ideas, etc. Israel already has a foot in theocracy and the religious extreme-right movements are pushing all they can for it to step completely into that kind of regime, eating up the democratic aspect of this state, chunks by chunks.
Ya'alon okays administrative detention of Jewish extremist suspected in church arson (Haaretz)
from the article: Israel's leaders have forgotten Herzl's dream