Got that right in a nutshell.
I'd hope, however, that Israel would consider India as well.
Another democracy under assault by Islam would make a wonderfully understand ally.
And their military R&D appears to be better off than China's. At least, on the naval side of things. Everything China has seems to be either bought by the Russian's or reverse-engineered from Russian equipment.
Israel already has a strong alliance with India. Te Bush administration wants to have control over Israeli arms sales to India and Singapore as well. So far the Israeli government has resisted.
I believe, if the U.S. turns on Israel, it will be an alliance with BOTH India and China. Both put together, though, are worth nowhere near as much as a strong alliance with the U.S.
I am not so sure you are right about the Democrats. The left wing of the party has been Arabist forever (think of Modale, Carter, or McGovern) but the mainstream leaders (Kerry, Biden, even Hillary Clinton) have strong pro-Israel voting records. Only time will tell.