Equal rights do not apply to non citizens, dufus. A country has the right to decide who it wants to allow inside its borders and how many.
Yes Israel has chosen to be a pseudo-Jewish theocracy, and to live with the problems it brings. So in response to the OP, no, Arabs are
not treated equally.
You don't just throw "theocracy" into the argument without even realizing what it means.
As an Israeli, I can trash Judaism every day and night in newspapers, TV and radio, and I won't get arrested.
As and Israeli, I can go undercover, with "the girls" out, with a "do me" skirt, out in public, and I won't get arrested.
As an Israeli girl, I can kiss another girl in public, and I won't get arrested. Or tossed off a roof.
As an Israeli non-religious person, I can argue for hours with an Ultra-Orthodox person about weather God exists or not, and nobody will think "blasphemy!" on me, because it's ok to have open discussions.
As an Israeli, I can say all religious people are idiots, and nobody will give a ****.
So don't talk about "theocracy"! you know nothing about it.