Pretty sure the leaders of Israel have made it illegal, and the grounds for exclusion from the Knesset, to disagree with that statement.
But it's not accepted to point out that Israel is a distinctly illiberal state by it's overt, foundational policy.
Israel's neighbors were the ones who encouraged Palestinian leaders to reject both citizenship and two-state solutions across multiple deal opportunities and instead opt for waging an endless violent rebellion. And when the coordinated wars were lost and the time came for offering aid, resources, and immigration opportunities - neighboring countries offered the Palestinians very little compared to the opportunities that Israel offers. They did not step up.
“A candidates' list shall not participate in elections to the Knesset, and a person shall not be a candidate for election to the Knesset, if the objects or actions of the list or the actions of the person, expressly or by implication, include one of the following:
“1. negation of the existence of the State of Israel as a Jewish and democratic state;
“2. incitement to racism;
“3. support of armed struggle, by a hostile state or a terrorist organization, against the State of Israel.”
Putting aside the nuances of "Jewish state" and what that does or doesn't mean, if you go to Israel you will find a culture and a people far closer to American values than anywhere else in the region.
Perhaps true, but these days Lebanon is up in the running. They do have a weird approach to "power sharing" in government, but it's not like Israel is free from its own sort of weirdness, as you've mentioned.