Which is illiberal and flawed. It doesn't mean Israeli citizens don't democratically choose their leaders.
Note that this cuts both ways. If Israel isn't a democracy, the Israeli people have no moral culpability in their state's actions because we have no way of knowing if they actually support it.
> There's no 'home country' they could return to because Israel is occupying it
Agree this is tragic. But again, historically not unique. Displaced people have existed across the history of democracy.
Something being wrong doesn't automatically make it all kinds of wrong. Israel illegally occupying the West Bank and Gaza and having unresolved reparations around the Nakba doesn't have much relevance to whether it's a democracy. Just whether it's a liberal or full one. (Among all of the other issues.)
Democracy doesn't mean voters can't choose to be awful.