One organisation that does analysis of different democratic states is the Economic Intelligence Unit (within the Economist Newspaper group), as described by the wikipeida overview
They rank Israel as a "flawed democracy", noting its high levels of pluralism and political engagement, but giving it a relatively low score for "civil liberties".
For comparison France, Belgium and the USA are also classed as flawed democracies, but for different reasons. Norway is the most highly ranked democracy in this index. This is only one way of measuring the democratic nature of a state, and as such should be considered an expert opinion rather than authoritative fact.
Others following similar analysis done by the journalists for the Economist could conclude that Israel is a democracy but not a liberal democracy. It is a matter of interpretation, and therefore a matter of opinion if this interpretation is correct.