Israel is a small country, but make no mistake, they will be a major player in Cold War V2. So, let's investigate.
Basic Info:
-Made an official country in 1948, when the now defunct League of Nations gave half of Palestine to the Jews, and the other half to the Arabs. The next day, a coaltion of nearby states declared war, but were repelled.
-Goverment is similar to the US or EU, namely a republic with a powerful senate.
Military:
An A+ here for them. Since Israel hasbeen fighting for existance with its neighbors since day 1, they've had lots of, err, practice defending what's theirs. The have argueably the best intelligence network in the world, the Mossad, and a hardened and efficient ground forces. They produce their own weapons too, so they won't be unarmed if someone takes over their supplier. Famous models of guns made in Israel include the Uzi, the Desert Eagle (though not widely used) and the Mini Uzi. They also have sophisticated anti-missile defences, and a reasonable stockpile of nukes. They could undertake a very aggressive style, and still be solid at home.
Economy:
Thanks again to Wikipedia, I can tell you that Israel has a very powerful economy, They have the best one in southwest Asia, and have good trade relations with the West. Even with sparse natural resources, they still have great agriculture, and last year they exported $48 billion.Very independent, and should be rich throughout thiss whole thing.
World Relations:
This is where the trouble starts. Everyone seems to hate Israel (including our current US gov't...), and it seems they will be fighting a multi-front war with little aid. The Arabs hate them 'cause they're Jewish, and the Democrats and Liberals over here don't like 'em because they fight terrorism the hard way, in essence becoming terrorists themselves. Luckily, this is the way it's always been, so don't expect any major changes in strategy.
Tech Level:
Nothing special, though miles ahead of their immediate neighbors. Won't be a hinderance, but no help here.
Overall:
Israel will be a powerhouse for sure. With a great military, they could launch an invasion and conquer their neighbors, or defend what's theirs and flumox the opposition. The Mossad will help keep foreign threats noticed and under control. The economy will help too because they will have full coffers for a long time. The only threat is if too many nations decide to pick a fight at the same time. Then, and only then, will the Israelites be in trouble.
Historical Comparison:
The Byzantine Empire from 400-800 AD. The Byzantines were very sophisticated in a Dark Age for everyone else. Fireships defended the capital from blockade, and professional cataphracts and mercenaries defended their stuff by land. They also had the major trade lanes through theBlack Sea and through China. Lastly, they were surrounded by enemies all the time. A partial list being the Goths, Huns, Arabs, and Turks.



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