Kinda.
Government members are still democratically elected and, as others more knowledgeable than me mentioned, the Arab Israelis can be part of the Parliament. No matter the flaws of the Israeli political system, it is much, much more than what any country in the region can offer to their own people. So it's not difficult to understand why the western populations, who are in their overwhelming majority utterly uninformed on the subject and what's happening in Gaza and the West Bank, see Israel as a beacon of light in the Middle-East.
While I somehow understand the reasons behind it, I personally believe that this ethnocentric view of the state does an immense disservice to the Israelis, for whom I have the utmost respect and admiration, and is ultimately bound to fail.
History won't look kindly on it.