See my post 18. Israeli muslim Arabs and Christians and Hindus and... have full and equal rights with Israeli Jews. And, yes, noncitizens do not have the same rights are citizens. This is the case in every nation in the world. Sorry to dispel your fantasy.
“Are citizens” should be “as citizens”
But other nations do not insist on exercising sovereignty over non-citizen populations. If Israel truly wishes to be a democracy it must either grant the Palestinian Arabs full citizenship or give them their freedom and withdraw from the territories. The present arrangement, one that has persisted for over 50 years, make a mockery of democracy.