Transliterating from English to the Semitic languages and vice versa is a tricky business, one that requires either gross approximations or arcane notations on both sides. For linguists, the choice is simple. There are dozens, or perhaps hundreds, of diacritical marks and established conventions that can tell a trained reader exactly how to pronounce a word in any language. For the uninitiated, however, it’s all about approximation. The average Westerner neither knows or wants to know how to properly pronounce an ayin/ain, any more than a farmer in Iraq knows how to spell Connecticut in English, or why there is a silent C and an extra N in it.
The end result is that when transliteration is done for a mainstream audience (i.e., one with no linguistic training), it does not generally conform to the strict rules, and uses simplified pronunciation symbols instead. The apostrophe is one of the most common of these, and is widely used to indicate a glottal stop. The Hebrew word Ha’aretz could also be written Ha-aretz or Haaretz. A lot of people do use Haaretz, but in my opinion Ha’aretz is a better alternative, because it indicates that there are three syllables in the word, instead of two.
(By the way, Ha’aretz is Hebrew, not Arabic. The Arabic word for “the” is Al, as in Al-Quds, Al-Aqsa and Al-Jazeera. And it is important to note that Ha’aretz is indeed one word, even though it translates into “The Land” in English. Articles in Hebrew are not at all like articles in English; “Ha” is not a word, but a prefix.)
The Ba’ath party could be written Baath party, but would the pronunciation of the word be clear in that form? I doubt it. In fact, when the Ba’ath party first started to be mentioned in the news, I distinctly remember that almost every American I heard using the word (including the reporters) called it “the Bath Party”. So you slide an apostrophe in there, and instantly your average Euro/American reader understands that there are two syllables in the word. This isn’t “telling you that this is a foreign word” - it’s telling you how to pronounce that certain foreign word.
Of course this doesn’t conform to the rules of English. That’s because it isn’t English. The word Ha’aretz isn’t a translation into English, it’s a transliteration. And it does indeed conform to the generally accepted rules of transliteration (for mainstream audiences, anyway. Technically, Ha’aretz ought to be Ha?aretz - but how many copies of the New York Post would that sell?)
Finally, it may please you to learn that it does work both ways. There are sounds in English that don’t exist in the official Hebrew alphabet, but have to be used anyway. Soft G is one, and the “ch” in “church” is another. Not a problem when you stick to Hebrew words and names, but when you have to write news articles about George Bush, or historical essays about Winston Churchill, you can’t just write Gorg Bush and Vinston Tzertzil and assume that people will understand.
So diacriticals are inserted, little slash marks above the gimel or the tzadik that modify the sounds. These markings don’t follow the official Hebrew rules at all. But everybody knows them and uses them. It's just one of those things.