Israel is not really that big a deal to the Middle Easterners, except for one important thing. They don't care about the plight of the Palestinians, and treat them like crap at every turn.
Israel a scapegoat, a rare topic in a world of taboos that they are allowed to openly hate. Arabs are powerless in the face of their own governments, but the shame and rage they feel is allowed to be expressed at Israel. Most Arabs have never been to Israel, and it doesn't affect their daily lives one whit, whether it was run by Jews, Buddhists, or Satan worshippers. They'd never know one way or another, and wouldn't care. They come up with a lot of reasons why they hate Israel (and, by extention, the West), but it all boils down to the fact that they're not allowed to hate anything else.