Freedom of religion/speech/press is not the issue here, it is state funding for Jewish religious institutions. I agree with the Court's ruling, but your criticism is an unfair one. Before giving advice to Israel, you can also give similar suggestions to many countries in Europe that have official state religions (e.g. the Anglican Church in England, headed by the Queen).
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Prof. David Shulman wins Israel Prize for religious studies and philosophy (Haaretz)
from the article: The government's test of principle