It would be childish to stop calling them. What would be best is to hold Israel accountable as any other democracy would be held accountable. Much like Iran, these tags get thrown around far too easily (democracy, republic) and I think it's important not only for the people of a country to demand accountability, but for the world to scrutinize these titles more frequently.
Democracy isnt Israel's problem. There arent cases of voter fraud, intimidation, etc.. Citizens of Israel can expect a fair and free election. This is unlike Iran that has consistently banned opposition parties, committed outright fraud among other things. The Knesset even tried to ban Arab parties but the Supreme Court later stopped them so there has been some support for Arab participation in politics. Israel's problem is how to handle the legal limbo surrounding the occupied territories and the future of a Palestinian state. Israel certainly has a democracy but a problem of citizenship. Anyone in the Palestinian territories can become a citizen of Israel but it requires a loyalty oath that most will not take. Eventually as the Arab-Israeli demographic grows, there will be a larger issue of Arab-Israeli political strength even if you exclude the occupied territories. I think Israel is a democratic state but that democracy (in spite of our common assumptions) does not equate to fairness or freedom for all people.
I would actually like to hear from some Israeli ex-pats or people of the Jewish religion that do not agree with Israel's policies. I just want to know what the general feeling is outside of what the media tells us. I wonder if everyone supports the ideals of the Israeli army and the Israeli settlers.
Some Jewish friends of mine have relatives living in Israel and it was interesting meeting one of them, the brother of the guy in the couple. The brother is a "classic" right wing nationalist. Said that there were plans in the works to attack Iran with atomic weapons. To just wait and see. That what has happened to the Palestinians was basically their own fault. Now our friends are devout, sent their daughter to the Jewish school set up a few years ago in Austin, largely by Michael Dell, and have paid for lessons in Hebrew for her. They certainly support Israel, but are appalled by the brother and his politics. They've traveled there and spoken to a lot of folks and told me that the brother is in the minority. I believe them. Certainly, this cat was scary. I'm sitting with him in a highrise condo in downtown Austin at night, at a party, and he's telling me they are going to nuke Iran. Not that they were thinking about it, but that plans were in train. Very, very trippy experience.
My only concern is if the two-state solution is not close, and Arabs are kept refugees just to reduce their influence in Israel as Israelis, or they are not given their full rights, or they are marginalized in society. Ultimately, there are a lot more Palestinians than Israelis in the world. I'd be willing to bet that a lot of non-Palestinian Muslims would consider immigrating to Jerusalem ASAP in the near future. For future events to not cause major problems, I hope they are taking all sorts of possibilities into account.
Being a democracy is a very easy process: holding free and fair elections that clearly reflect the will of the majority. The Western standard of democracy differs in many fundamentals ways of the very basic and crude definition of democracy. Liberal democracy is what is desirable, not just a democracy. A democracy can be very tyrannical and oppressive or even encourage outright genocidal tendencies against unprotected minorities. This is where America got it right (eventually), as the realization became that institutionalizing safeguards to correct against the evil parts of democracy was a necessary step to forming a more perfect union. People also forget that Arab-Israelis are essentially one-fifth, that is a full 20%, of the Israeli electorate, and I would reckon that number is set to be even higher in another 10 or 20 years given the demographic trend inside the green line. By comparison, Blacks make up less than 12% of the American population, and yet America just got around to electing the first African-American leader in its history. I think it is REALLY unfair and inaccurate to compare America to Israel, only Israeli apologists in America like to do that in order to draw some sort of moral equivalency or support for Israeli actions. I never tire of hearing influential Jewish-Americans using American policies and actions as a diversion tactic to deflect criticism of Israel or Israeli actions, and they NEVER get called out on it by the American media