Israel has good reasons to be paranoid about their existence.
The possible reasons could be:
1. The Balfour Declaration was a declaration of intent for a Jewish State.
The Balfour Declaration of 1917 (dated 2 November 1917) was a formal statement of policy by the British government stating that "His Majesty's government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object, it being clearly understood that nothing shall be done which may prejudice the civil and religious rights of existing non-Jewish communities in Palestine, or the rights and political status enjoyed by Jews in any other country."
Since it was a sort of Imperial decree without taking into consideration of the local sentiments or the consent of the locals, it is open to question and hence the discomfort.
2. After centuries of being a People without any Homeland and at the mercy and ridicule of their host nations, they looked forward to a Nation of their own, where they would be free of discrimination and racial subjugation and hatred. For a People who were treated with scorn and disregard and almost as sub humans, this Promised Land was a dream come true and too good to miss out on. Hence, a paranoiac attachment to this land, and given it rather ‘dubious’ and arbitrary rationale and foundation, it leaves the Israelis psychologically and mentally unsettled. This is possibly the reason as to why they overkill to establish their rights over the land at the expense of others, even though the Balfour Declaration states that the State so established should not prejudice the civil, religious and political rights of the native inhabitants.
3. Israel is surrounded by hostile Arab neighbours who had not recognised Israel’s right to exist. Wars have been fought and the united Arab armies defeated. The Yom Kippur War gave Israel the fright of its life, even though the war ended in Israel’s favour. Even though, Egypt and Jordan have recognised the right of Israel, the remainder of the Arabs have not. The Hamas, supported by these Arabs, are a constant threat to the existence of Israel and the security of its citizens. Thus, Israel is in a constant state of ‘armed and hostile peace’! Peace without Peace!
4. The straw that broke the camel’s back as far as Israel is concerned was the rude shock given by the Hezbollah in the confrontation with them in Lebanon. The undisputed Israeli military prowess and superiority was broken by what was taken to be a rag tag militant group and they were trained and supported by IRAN!! Therefore, it was obvious that Iran could be a tough adversary unlike the Arabs. Hence, the worry over Iran.
Thus, Israel has good reasons to be worried about any change in the security status of the Middle East.
Further, while the Sunni Arab nations can be ‘controlled’ by the US, Iran cannot be controlled! In such a scenario, if Iran has nuclear weapons, it can be catastrophic for a small nation like Israel. Therefore, Israel looks upon Iran with great suspicion and would like to take action to see that Iran does not possess any greater strike capability that what it already has!