As far as I can tell, hooahguy is right in this aspect. I can find very little about oppression concerning Muslims in Israel, though it might have changed over the last ten (?) years.
Well lets see

Institutional, legal, and societal discrimination against Israeli Arabs, non-Orthodox Jews, and other religious groups continued.
Now of course the people that wrote that could be making it up ...could you address you complaints to the US State Dept if you wish to dispute what they wrote .
But hey if you want to go past the summary in the State depts human rights reports they have another bloody big one just on religious freedom