There can be little doubt that Israel counts as a "democracy," certainly with regard to the majority Jewish population and even with regard to Israel's Arab citizens, who participate in elections and are able to elect some ethnic Arab represenatives. Certainly no other country in "the region" comes so close to meeting the standards of democratic rule.
I address the question of the "democratic" character of the state of Israel in my comments to his post (pasted below), but first let's look at the specific example used to illustrate his larger point:
[It is] necessary to note that the debatable scope of the present war in Gaza, even if one accepts the view, as I do, that it was precipitated by the failure of Hamas to continue the truce and their decision to lob rockets into Israeli territory, has been decided upon by an Israeli government that is just as lame-duck as our own. Moreover, it is hard to escape the view that the most relevant decisionmakers are motivated by their deep (and altogether justifiable) desire to forestall the return to power of Benjamin Netenyahu and, therefore, determined to prove to his potential supporters that they are as willing to use military force, regardless of consequences to the Palestinians, as he presumably would be. It is hard for me otherwise to understand the decisions that Israeli leaders have made, given the foreseeable failure to eliminate Hamas as a political force in Gaza.
It's refreshing to find the decision to bomb and invade Gaza described as "debatable." And I happen to think there's much to the argument cited here about the possible political (in a rather crass sense) reasons behind that decision. In my comment to his post I atttempted to speak to the question of how this might be related to the democratic character of Israel in a manner ignored or overlooked by Levinson but raised by myself and several other commenters. As I wrote,
While I largely agree with your (comparative) characterization of Israel as "democratic" (in other words, I would not agree with some critics [e.g., Oren Yiftachel] who would go so far as to describe Israel as a non-democratic 'ethnocracy'), one telling and I think troubling circumscription of Israel's democracy is the focus of (neo-)Zionists on the Jewish character of Israel, with no pretense whatsoever to separation of church and synagogue, so to speak. This is made quite clear in Aharon Barak's The Judge in a Democracy (2006). Barak reminds us that "Israel was founded as the state of the Jewish people. [The founding of not a few nation-states on along exclusivist ethnic and/or religious principles is similar in this regard, but what is more troubling is what, at least for Barak and other Israeli leaders, follows from this historical premise, namely, an axiomatic 'constitutional' premise:] The reason for the existence of the State of Israel is its existence as a Jewish state. That character is central to its existence, and it is 'an "axiom" of the state.' It is a 'fundamental principle of our law and our system.' We therefore cannot allow a list or an individual seeking to negate this reason and this foundation to participate in elections." This goes far beyond requiring would-be electoral participants to recognize the right of the state of Israel to exist, for it excludes participants who would seek to put all religious and other worldviews on equal footing with Judaism vis-a-vis the democratic character of the nation-state of Israel.
The concern is not with a democractic state simpliciter (i.e., negating the existence thereof as found in the explicit or implicit 'goals' or actions of a candidate list), but with negating the existence of a "Jewish and democratic state." Needless to say, Israel's so-called demographic problem may turn this amended (in 1992) Basic Law (as interpreted and applied by the Supreme Court) into a pragmatic contradiction. Concrete consequences are not lacking: pervasive discrimination against Arab citizens, the political role of religion, the blurring of the state's geography, including the military control and settlement of territory in the West Bank and Gaza (e.g., roughly '60 percent of the West Bank is now held by Israeli Jews as private, state, or military land,' and segregation is very real for Orthodox and Ultra-Orthodox Jews, Russian immigrants, and Palestinian Arabs, among others). And this should not prevent us from acknowledging whenever and wherever Israeli authorities have taken significant steps toward deepening those democratic features which do in fact exist.
Again, what is troubling is the legislative, political and cultural licensing of the notion that one cannot sufficiently separate, in the case of Israel, the "Jewish" from "the democratic," hence even well-motivated or well-meaning criticisms of the Jewish nature of the state are seen as equivalent to, indeed, are in fact reduced to, "attacks on democracy." The Judaization of Israel should therefore remain an important concern for all who cherish the democratic elements of this state, especially in light of the "Arab demographic danger" and the resistance of Palestinians to a particular government's agenda and policies, including [those of the] IDF.
Read the comment by "Mourad" at Balkinization as well, and not just because he believes my remarks were a "start along the road" to exploring the question of "whether [or not] Israel is a true democracy." To reiterate: I think it's fair and important to characterize Israel as a democracy, but it has some distance to go in ridding itself of those Zionist features that have come to be indissolubly associated with Israel insofar as it is at the same time (normatively) described as a Jewish state. Note that I'm not making the claim that all those who historically identified with Zionism were Jewish in the religious sense, they were not, but those who favored a more messianic-like religious understanding of Zionism were front and center among the founders of the state of Israel and have remained the ideological pool from which its political leadership has been drawn. Note too, and despite what Professor David Bernstein of Volokh Conspiracy has said about my views (I've been unable to access the post this morning by Kevin Jon Heller at Opinio Juris--on 'Dershowitz, Israel and Proportionality'--wherein Bernstein makes this unsubstantiated claim, what is in effect an outrageous and absolutely false inference from other statements I've made), I assume the state of Israel has every right to exist as a modern, democratic nation-state. Update: For Kevin's post with Bernstein's claim, see here (1.03.2009 at 5:23 pm EST). It's placed in a shaded box in yet another post (Professor Heller has received an apology, but I have not).
Addendum: I suspect the remark that "those who favored a more messianic-like religious understanding of Zionism were front and center..." bears some elaboration. First, I should have left out the adjective "religious" to get across the idea that self-declared secular Jews among the political leaders were messianic as well. This is made clear in Jacqueline Rose's The Question of Zion (2005), for in the end, there turned out to be very little difference between secular and religious Zionists: both imbued nationalism with a messianic strain, for leaders like Weizmann "merely displaced" the "false messianic hope" they avowedly "relinquished." Indeed, "the language of secular Zionism bears the traces and scars of a messianic narrative that it barely seeks, or fails, to repress." An exemplar here is David Ben-Gurion: "A secular Jew, like so many of the key figures in the early political history of Zionism, Ben-Gurion bequeathed to Israel in his rhetoric the messianic destiny of the nation-in-waiting," as the "language of salvation and redemption saturates...[his] prose." One disturbing consequence: "Under pressure of the biblical narrative, two thousand years of history fall into the dust," one reason why Palestine, to the Zionists, was a "land without a people" (when confronted with unavoidable empirical evidence to the contrary, 'ethnic cleasing' became the norm: cf. Ilan Pappe's The Ethnic Cleansing of Palestine, 2006). Ben-Gurion understood the implications: "We must create a majority in the Land of Israel in the next twenty years." Is it any wonder that, today, Israel's "demographic problem" is both a manifest and latent cause of so much political and cultural anxiety? For better and more often for worse, "Messianism, as unconscious inspiration, is in the air and soil of Israel."
Update 2: While reading, of all things, Joseph Raz's Value, Respect, and Attachment (2001), I came across the following clarification of Barak's understanding of a "Jewish state:"
An Israeli Basic Law declares that the State of Israel is a Jewish state. Israeli courts struggled with the implications of the law for their practice. The president of the Supreme Court, Mr. Justice Barak, said that a Jewish state means a state which embraces the values which Judaism gave the world, namely (and I quote) 'the love of mankind, the sanctity of life, social justice, equity, protecting human dignity, the rule of law over the legislature, etc.' I think that he gave the statute the only acceptable interpretation. Notice that in the same sense France too can be a Jewish state. It too can embrace the values which Judaism gave to the world.... Indeed, it may well be said that in that sense no state can be a morally good state unless it is a Jewish state. Does that show that Barak adopted the wrong interpretation? Did he not empty that article in the law of all meaning? No and yes. He did empty the law of meaning, but it was the right thing to do. It would be wrong to suppose that on top of following justice, equity, dignity, and other universal values, Israeli law should follow some additional specifically Jewish values, which may conflict with justice or other values, and compromise them. (pp. 37-38)
Unfortunately, the fact that the wording of the law remains on the books, means it is always liable to an interpretation other than that provided by Barak. Indeed, if the law is thereby emptied of all meaning, why not change it? The plain meaning of the language here is not at all conducive to the secular apologetic gloss, indeed, it implicates the centrality of "specifically Jewish values" in the State by its inclusion and non-Jews can be forgiven for understanding it in just that fashion. For more on Barak's identity as a cultural Jew and secular Zionist, see here. (There was an interview in Haaretz some years ago with Barak in which he explains his personal views but I was unable to find it).
It would be instructive to consult Aharon Barak's Purposive Interpretation in Law (2005) by way of interpreting the language of the aforementioned Basic Law and to explain precisely why, in Raz's words, he "emptied [that article of] the law of meaning." For instance, Barak writes that "The judge must give the language of the text a meaning that will not 'tear' the 'surface casing' of the words of sentences." Moreover,
Purposive interpretation is based on language, purpose, and discretion. Language sets the limits of interpretation. Purpose determines the choice of legal meanings, within the boundaries of language. Discretion operates when the purpose of the text does not point to a single, unique legal meaning. [....] The range of semantic possibilities includes the language's totality of meanings [elsewhere Barak discusses the 'extraction' of legal meaning from semantic meaning]. It includes the natural and ordinary meaning and the exceptional and special meaning. Of course, the [rebuttable] presumption is that the purpose of a norm is expressed in its natural and ordinary language. [....] [In ascertaining the 'authorial intent' or 'subjective purpose' of a text, judges] give the language of the text its natural and ordinary meaning. They assume that accepted semantic conventions are honored. They employ rules of logic, reasonableness, and common sense. They look for normative harmony within the text's totality. [....] The objective purpose of a legal text is the intent of the reasonable author. At a high level of abstraction, it is the 'intent of the system.' The intent of the system is the values, objectives, interests, policy, and function that the text is designed to actualize in a democracy. It is determined by objective criteria.
Of course it was the "intent of the system" that Barak relied on to interpret the "Jewish" character of the State to mean the constitutional quintessence of secular democratic values and principles wholly bereft of anything uniquely Jewish whatsoever!
I'll leave comments open as long as they are civil and not predominantly or unjustifiably ad hominem (if you're uncertain as to what that means, think, for instance, of the Republic of Letters and French salons of the European Enlightenment).