Throughout the twentieth century, the treatment of religion in the social sciences had been heavily shaped by the premises of modernization theory. This theory was responsible for the development of two concepts—the secularization thesis and the traditional school of civil society—which deny any space for religious content and actors in the public and political spheres. Both concepts rely on the exceptional experience of the west and share deterministic, static and essentially pessimistic assumptions regarding the ability of religion and the state to mutually coexist in democratic settings. In view of the above Israel's treatment of religion stands out. Israel challenged the premises of the secularization thesis and instead granted a significant official role to religious contents and actors in the state. Contrary to common beliefs, this research demonstrates that Israel's policy resulted in mainly positive consequences and contributed to the stabilization of its democratic regime. Furthermore, Israel's inclusive policy on religion proved successful in containing and isolating mounting religious challenges to the state in recent decades and in securing the stability of the democratic regime. Israel's account reveals two important lessons about the nature of the state-religion relationship. First, it offers a dynamic and mutually constitutive perception of the relationship between the state and religion. Second, it advocates development of a case-sensitive approach toward religion, depending on specific social, historical, and cultural attributes. These lessons might prove highly relevant for post Arab spring societies in transition.