The State Department cited Saudi Arabia on Tuesday for denying religious freedom to non-Muslims and found fault to a lesser degree with other allies including Israel, Belgium, France, Germany and Pakistan.
Secretary of State Condoleezza Rice, who will be going to Saudi Arabia at the end of the week as part of a trip to the Middle East, released the report.
"Freedom of religion does not exist," the report said. "Islam is the official religion and all citizens must be Muslims."
In Israel, the report said, some non-Jews, primarily Arab Muslims and Christians, experience discrimination in education, housing and employment.
"Tensions between Israeli Jews and Arab Muslims and Christians remained high due to the institutional, legal and societal discrimination against the country's Arab citizens," the seventh annual report to Congress said.