The paper starts with an analysis, based on Hans Kelsen’s methodology, about the difference between law and morality and their relationship to religious rules. The difference between law and morality lies in the way they are enforced. Law is backed by a threat of socially organized physical coercion; moral rules lack this sanction. The validity of religious rules is based upon Divine will; but if these rules are adopted by state law, their validity derives from the (secular) legislator. The notion of ‘rule of law’ has two different meanings, a formal and a substantive one. Formally, every state lives under the rule of law (Rechtsstaat, in German). The substantive notion relates to the content of the law, its evaluation from an ethical point of view, based on (subjective) ideological and political assumptions about the requirements of justice. In the context of law and religion, the rule of law is used to establish the correct solution to the conflict between the constitutional principles of individual and collective freedom of religion, freedom from religion and public order. The conflict between law and religion is particularly intense in Israel. The problem is to realize the constitutional program of establishing a state that is both Jewish and democratic-liberal. The traditional Orthodox concept of a Jewish state clashes with the modern notion of a liberal, secular-national state. The solution can and must be found in adapting the religious tradition to the modern reality of a Jewish state, composed of multicultural communities, within the framework of a liberal democracy.