Way I understand it, all the secular and atheist people in Israel go to Cyprus to get married, but they come back and the government recognizes their marriage no problem. What's more, Israel is one of the very few countries in the world that acknowledge gay marriages as valid - some gay couple got married in Canada and went to court to have it recognized, and the Israeli Supreme Court sided with them.

Now I don't know if there's some special policy about marrying Arabs, but I really rather doubt it. I could be wrong. But your point about having to marry abroad doesn't say anything about whether the marriage is recognized by Israeli law, those are two distinct things.