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What do they need this funding for again? Would they need this if there was peace?
They might. There's peace because attacking is too dangerous (what they have now, at least with the nations not attacking them) vs peace because treaties are in place vs peace because no one wants to attack them. That middle one is risky because situations can change fast.
And there's another angle that questions whether they wouldn't need weapons during peace for less generous reasons.
So in the ideal scenario where there is lasting peace with open borders and open trade... Why would Israel need funding? If anything the whole region would benefit from this I don't understand why people think that the country NEEDS instability. They are doing well off as is with these problems and I would bet everything I would ever own that lasting peace would make their situation even more profitable.