The cake debate is stale at this stage. Past its sell by date;-)
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Shalom/salaam.
10,000 years of Middle Eastern civilisation and the place is not at peace but rather in pieces.
And in law they have the right to refuse custom, it's just that ashers made such a ham fisted mess of it that they landed themselves in this mess. If they do not want to provide their services in certain circumstances then their staff should be properly trained how to deal with these issues or else get someone higher up to deal with it. But ashers mistakes were firstly to agree to do the cake, and secondly refusing to do the cake for the reasons they gave. That was discrimination.