On January 21, the Israeli High Court of Justice restored two political parties to the ballot for the upcoming national elections. See this story. The two parties, United Arab List-Ta’al and Balad, had earlier been banned from the ballot because they advocate separation of church and state.
I think you might find they were banned for being Arab and having friendly ties with Arab nations they are in conflict with (such as Jordan, Iran, Syria).
Yeah, like everything in Israel this is never a cut-and-try, secular issue.