You're right. Israel does have serious human-rights issues with the Palestinians.
But: Israel also has a thriving democracy that subjects its government officials to constant, withering criticism and investigation. We have a court system that isn't afraid to punish government officials. (We just sent a former president to prison for rape, and a former prime minister is being tried for corruption.) We have a free press, with newspapers and blogs that raise every possible political idea you can imagine. We have mass rallies and protests. We allow our citizens to travel abroad wherever they want, whenever they want, and encourage them to speak with people from other countries. We invite people to come from other countries into Israel, and to travel more or less wherever they want, without government supervision.
(And yes, many of these privileges are unavailable to Palestinians. Believe me, many of us in Israel realize this, and both vote and act accordingly.)
I can understand and respect someone who says, "I'll only do business with liberal democracies like those in North America and Western Europe." That's a reasonable and consistent approach to things.
But to single Israel out for attention and boycott, when many countries have worse human-rights records and none of the positive democratic attributes I mentioned above? That seems both unfair, disingenuous, and lacking in perspective.