Never been to Iran, but I live in Israel. Israel has its problems, but it is for the most part a western-style liberal democracy, religious tolerance very much included. There are plenty of religious minorities here, including Muslisms, Christians, and lots of other faiths, and they are not discriminated against for the most part.

(Note: I'm obviously leaving aside the issue of the Palestinians, which is not exactly about religion but about ethnicity/nationality/sovereignty.)

  I haven’t been to either but would have expected Israel to be better again.

I'm curious, why would you expect that having no experience of either?

Because one is a theocracy, and the other one a liberal democracy. The expectation is not wrong, either, in my view (and I have been to both countries).

From various news sources I guess? I read about the region quite a lot, including from sources that are critical of Israeli state behaviour (eg Robert Fisk) but that’s no substitute for being there.

Thinking about it, I guess I assume US sources (nearly regardless of source) to be very unreliable on areas with clear policy bias, e.g. Iran & Israel. Given that I think I just assume "I have no idea, really" on a region like that if I don't have some more personal experience. I suspect this is due to earlier surprises, when my expectations were off by quite a bit, leading me to question the sources.

Of course this isn't US specific.