Yes, the system is one of apartheid. Two populations intertwined, one Jewish, one Palestinian, governed by two different legal systems. Jews are treated like full citizens of a functioning democratic state; Palestinians are not, even though they are ruled by the same state.
The A zones where the Palestinian urban populations concentrate are mini-bantustans. Every movement is by permit; every move in any direction, every act of import/export, payments, licensing requests, all exit/entry.
It is surreal, a cross between a Dali and Escher painting, inscribed into the topography, bureaucracy, architecture, transportation system, and individual psychologies.
The Separation Barrier, meanwhile, has helped erase the whole thing from mainstream Israeli discourse. Aside from a handful of brave souls and organizations, the only Jews who see this dystopia are the settlers, who drive the story forward, and the soldiers, who make it all possible.
There are some signs of progress in the A zones; some real prosperity in Ramallah, for example, although many say the wealth is derived chiefly from corrupt skimming of the international support channeled to the Palestinian Authority. And, Israeli soldiers are not omnipresent in the crowded downtowns. This is progress.
Still, the overall system is clearly deeply unequal, along religious/national lines, and clearly unjust.
There are all manner of explanations for how we got to this point, and people of good faith can debate over who is responsible for which piece of the mess.
I don't think, however, that anyone can reasonably argue that it's OK for this system to continue.
James Ron is an Israeli citizen, as well as a citizen of the US and Canada. In the mid-1980s, he served for three years in the Israeli military, including in the paratroops. Since then, he worked for Human Rights Watch on violations in Israel and the Occupied Territories. He wrote extensively on the region in his early academic career.