I am completely committed to the State of Israel, and I do believe that it could be the first step on a long, long road to redemption and moshiach.
That said, I also think that several things in Israel have got to change, and the sooner the better:
1. The Rabbanut (state-sponsored Chief Rabbinate) has got to go. I have no problem to with the notion of the state providing monies to fund educational institutions or food pantries or whatnot run by religious groups, but all have to get equal money, regardless of sect or denomination. Likewise, I have no problem with the government accepting religious marriages and divorces as legally binding. But there needs to be civil marriage and divorce, and the marriages and divorces of all rabbis must be equally accepted by the government, regardless of sect or denomination. And if there's going to be a national organization offering hashgachah (certification of kashrut), then it needs to be free of corruption, and conforming to the usually minimum halakhic standards, not subject to every Haredi rabbi's nutty attempts to become ever more needlessly strict. No segregation of sexes on public buses. No officially segregated sidewalks in religious neighborhoods. And so on. In short, Israel has got to really be The Jewish State: that is, the State of all the Jews. Judaism in Israel should not be a Haredi monopoly, it should be pluralistic, because the Jewish people is not all Haredi. Or even mostly Haredi. This will make Israel more attractive to Jews from all over the world, and provide Israeli Jews infinitely more options, choices, and religious freedoms than they currently enjoy.
2. No more mass army exemptions or endless welfare for yeshivah students and kollel boys (Haredi youths who spend all day, every day, learning Torah). In Pirkei Avot it says:
רבן גמליאל בנו של רבי יהודה הנשיא אומר, יפה תלמוד תורה עם דרך ארץ, שיגיעת שניהם משכחת עוון; וכל תורה שאין עימה מלאכה, סופה בטילה וגוררת עוון
Rabban Gamliel son of Rabbi Yehudah Ha-Nasi said: Torah is best accompanied with secular life, for the two of them together cause sin to be remitted; Torah unaccompanied by secular work will end in meaninglessness, and will cause sin.
In other words: "Get a job, sha na na na, sha na na na na: get a job." Learn Torah, of course. Learn plenty of Torah. But get a job, participate in society, and since you're Israeli, serve your time in the damn army, like everybody else. Nobody is too holy to serve. If you're a pacifist, then do your civil volunteer service, like the other pacifists. But kollel shouldn't get you a free pass from standing up and doing what the Jewish State needs from its citizens. If kollel boys and yeshivah students don't like that, I can accept their argument: in that case, they should move to New York, or New Jersey, or Chicago or Cleveland, where there are plenty of kollels, no requirement for military service, and probably Orthodox Jews willing to pay to keep unemployed young men learning Torah all day and nothing else.
3. Religious political parties have got to go. All of them. Right-wing, left-wing, centrist, whatever. The Knesset is religious enough in that it is the governing body of the Jewish State. No more religion than that needed.
4. Civil rights for Israeli Arabs. I have no problem with the need for security. And I understand that sometimes that might involve some tough action in the West Bank or Gaza. And I also understand that on occasion, it might prove to be that an Israeli Arab is caught up in these kinds of problems, and becomes a security risk. But none of this justifies Arab neighborhoods getting crap municipal services: no trash collection, or no street repairs, or intermittent electricity or water, etc. And none of it justifies Arabs getting discriminated against in employment or education, or getting third-class treatment in dealing with government benefit or social services offices, as too frequently happens. Discriminating against the Arabs just p***** them off, and makes them less happy to be Israeli citizen, and breeds sympathy for unfriendly causes. And besides which, the Jewish State ought to be emblematic of Jewish ethics, and treating the non-Jew living within the Jewish community like crap is really, really not Jewish values. Really.
5. Gotta crack down on pollution. The environmental situation is just out of hand. The entire Yarkon river is a toxic nightmare, among other crises. WTF, Israeli government? Whether you're totally secular, and you just know that Israel's your country, or you're not completely secular, and you believe Israel's our holy land, it's equally a shame and a disgrace not to keep such a lovely and special place pure-- or at least, non-toxic.
As for the Palestinian problem.... I think that it would have been better had Israel just annexed the West Bank outright in 1967, made everyone accept Israeli citizenship or get the hell out. But Israel didn't do that. And that ship sailed a long time ago. Regardless of what could've or should've been, we have to deal with what is. And the truth is, Israel needs peace. I think the two-state solution is going to be the only way.
I think Israel has to be willing to give up all the Jewish towns in the West Bank except for most of the Gush Etzion suburbs of Jerusalem. I think it's pretty clear that Jerusalem has never been on the table, and the nearest parts of the Gush are just way too interconnected to Jerusalem to give up. But everywhere else, whether it's smaller places like Tapuach, or larger places like Maalei Adumim...that's just the price of peace. And we land swap the equivalent area to the Gush and the Arab neighborhoods of Jerusalem, and pay over reparations. And if the Palestinians don't like it, tough. We pull out, lock down the security fence, close up the door behind us, and formally acknowledge the State of Palestine, and get the US to acknowledge it also. They can do whatever they like behind there: if they build and prosper, more power to 'em. And if they turn on one another and fight until the terrorists control everything, that won't be our problem unless they're stupid enough to start a war with Israel.
Hopefully it won't come to that. But I think the Israeli government has got to show some good faith. If they want to show they're serious about Jerusalem not being on the table, and encourage a bunch of building projects there, fine. But that means they have to stop construction in the West Bank, and start pulling out the smallest settlements. You gotta give a little to get a little.
And if we're going to issue our legitimate complaints about the leadership of the PA, we should look to our own leadership as well. The problem is that the government is half right-wing zealous nutjobs, and half frayerim (suckers, idiots, pushover wusses). Guys like Bibi Netanyahu and Ehud Barak and Tzipi Livni are all hacks, with no presence, and no balls, no subtlety, and no sense of diplomacy from a position of strength. We need someone like they used to make 'em: Ben-Gurion, or Begin, or Rabin, or Sharon. Golda, even. And they seem to be nowhere to be found.
A two-state solution is necessary. Whether it will ever materialize anytime soon...that's another story.
Those are my feelings about Israeli politics.