As Ottawan points out, this is 'Democracy Washing' - or not saying quite what you mean. Kirchick is right that "we treat gays better" is not trotted out directly as a defense of the occupation, but this one detail is used to demonize Arabs whenever convenient, and whenever the larger issue of the occupation comes up. Very often the people who use this argument have very little interest in gay issues. Note the rhetoric - "far left gay activists" - this is essentially a propaganda piece.
Shaffir to Herzog: Opposition failed to show leadership in political battles against PM (Haaretz)
from the article: The fallacy of the 'pinkwashing' argument