In view of the comparative records of Palestinian Muslim and Israeli actions towards their Christian minorities, Israel comes closer to the positive laicity suggested by the Pope and President Sarkozy than Muslim Palestinians.
There is a reason why the observation is neither obvious nor an enthusiastic endorsement of Israeli treatment of Christians:
There is a substantial overlap between the way Christians are treated under Palestinian rule and in Israel, though as the dry concluding remark notes, the Israelis come closer to getting it right. While Hamas-dominated regions of the Palestinian territories have overt persecution of Christians, mostly in attempts to drive them out, rather than actually kill them, and the PA has been drifting that way as the Muslim Brotherhood has increased its sway in the Sunni Arab world, to the extent that the PA still holds to the PLO’s old pan-Arabist founding principles, it is moderately supportive of Arab Christians as fellow Arabs (don’t forget the PFLP used to be headed by George Habash — Muslims do not name their sons George). The Israelis are at best grudgingly tolerant of Christians, and at worst engage in mild persecution: soldiers roughing up Christians on their way home from Pascha services at the Church of the Holy Sepulcher and stamping on candles lit from the Holy Fire, Hasidim spitting at Christians in the street, and the like.
Quite frankly as an Orthodox Christian, I would like to see Russia return to the role it played back during the days of the Tsars and the Ottoman Sultans of protector of Christians in the Levant, esp. seeing that American policy in the region, whether wittingly or unwittingly always seems to be objectively bad for Christians.