The economist divides all countries into four categories: Full democracies; Partial democracies; Hybrid regimes and Authoritarian. I was somewhat surprised to learn that Israel ranked as only a partial democracy. However it is in good company - France, Italy and Greece are also only flawed democracies.
What is a flawed democracy?
Flawed democracies: These countries also have free and fair elections and even if there are problems (such as infringements on media freedom), basic civil liberties will be respected. However, there are significant weaknesses in other aspects of democracy, including problems in governance, an underdeveloped political culture and low levels of political participation.
Well, Israel certainly has problems in governance. A look at the breakdown of scores for specific criteria, shows that Israel's "flawed" status is due to a lowish scoring in civil liberties, and mediocre scores at political culture and government functioning. Sadly the Economist does not give any details of its exact criticism for each country, so I'm still slightly unsure which civil liberties Israel is scoring so badly at.