Somehow I think if Isreal was located in Northern Europe or South America, the arabs would care little about Israel, if they even knew the country existed. While Islam may play a role, I wonder if nationalism and bad blood (like the Hatfields and McCoys in this country) dont account for much of the problem. I mean even if they all shared the same religion, I think the Palestinians and Israelis would continue to hate each other for all the evil each has done to the other over the past fifty years.
Israel is both an outpost, a border, and surrogate in a larger war.