The history of Israel and its creation are unknown, due to the Divergence. However, in the Fallout world before the Great War, the country of Israel was almost certainly a place where Arab-Israeli tensions often boiled over into conflict as in the real world. This seems especially true due to the fact in December of 2053, a terrorist nuclear weapon destroyed Tel Aviv, a large city in the country, irradiating the surrounding area. It is unknown if Israel was destroyed in the attack.
Israel is also referenced in an inscription on a gravestone in Golgotha.