[Drammach]

It's not so much the foreign aid to Israel that is the problem.. ( although I'm sure it plays a part today..)

It is American support..
IIRC, Israel was hit with a trade embargo some time ago, ( '70's ? ) due to some refusal to "cooperate" with the (arabs who call themselves palestinians) and if not for American support, that embargo might have devastated the economy....

Without American support today, ( and foreign aid ) Israel could face economic ruin..
The EU would probably refuse to trade, we can almost guarantee that most if not all Arab nations would refuse Israeli trade, and many other nations, especially those with muslim populations would probably join in as well..
The pressures on other nations would be immense..
And Israel would be even more isolated than it already is..

I'm not sure Israel could withstand such an assault..

[littleleaguemom]

There is already a Norwegian group boycotting Israeli products. Several mainstream US churches and the World Council of Churches are also considering disinvestment a la South Africa.

[Alouette]

IIRC, Israel was hit with a trade embargo some time ago

The Arab League has been boycotting Israel since Israel became a nation. The boycott continues.