I have sp[ent a great deal of time in Israel. It is neither a democracy or a capitalistic country. It is a socialist country and is a theocracy. Observer the political status of the 15% of the population that is not Jewish or the status of foreign investment.
Israel is a European style social democracy.
Not my cup of tea, mind you, but a hell of a lot closer to the US model than the thugocracies that surround her.