That’s nice excuse making. There’s YouTube videos of Israeli bus drivers refusing to take Palestinian passengers.

HOAs in America are private contracts but the Knesset passed The Admissions Committees Law (2011) which allows hundreds of small towns built on state land to select applicants based on their “social suitability”. The law is used in practice to filter out Israeli Arabs and members of other marginalized groups. The fact that the government does this is much much worse than an HOA.