I'm not sure either is accurate. The third world is certainly more obvious in Israel, when things like this occur - a donkey drawn cart heading north, a block up from our street.
But a lot of what goes on in the U.S. doesn't seem very first world to me either (like millions of Americans without access to proper healthcare). The terms are really just a differentiator for GDP, not quality of life. As Einstein said, "Not everything that can be counted counts and not everything that counts can be counted."
On a slightly lighter note, I miss U.S. toilet paper. For a first world country (and Israel is in the same category as most of Europe in this case), they suck at producing decent toilet paper. The stuff here reminds me of visiting my dad in Bolivia. As I begin to run out of the little things that remind me of home, I realize I am not yet adjusted to this new place. My apartment feels like home, but the country does not.