It all started with a tag line in the United Nations partition of 1947 as a "Jewish state". Now the Jewish state started out with one major USP: A state for Jews (da).
Through the years instead of progressing with its brand and emphasizing on more and more strong points such as, High-Tech, medicine, agriculture, Nobel prize winners and so on and so forth, Israel kept pushing the same old USP. But through those years, things have become worst for the Israeli brand. Wars, upraises, terror attacks, world opinion etc. made the brand unappealing at the least.
With the world starting to suffer from extreme Islamic terror, one would expect Israel's brand to score some points back, but yet... apparently it doesn't. I think Israel's target audience i.e. the Jewish people are the wrong, or not the main audience Israel should consider. The Jews world wide are a captive audience anyways. Israel should start targeting different markets and rebrand itself if it wants to survive today's hostile markets, and I believe some drastic measures are in order. Maybe Israel should show the world for instance, how do Israeli Arabs live in Israel Vs.. in neighboring Arab states. Thus, rebuilding the Israeli brand as a multicultural one instead of just a Jewish one. Or even more, forget about religious al together, including the Jewish one and keep on marketing its successes and world wide collaborations with different states in different fields.
Well... here's a good start