Pan-Arabism actually makes it big, and instead of collapsing, the UAR goes on to incorporate Lebanon, Jordan, and Iraq. With time, Libya might join, and then maybe Algeria, and eventually the rest of North Africa (not crazy likely). This strong UAR should be able to conquer the Arabian Peninsula if they strike before the US starts propping Saudi Arabia to ridiculous levels.
While Israel is useful here as an external enemy, the unifying fact is "We're all Arabs" rather than "We all hate Israel".
While this power almost certainly won't be a third side on the Cold War (having a large, strong, not very friendly Arab state will preclude strong dependence on Middle Eastern oil), they'll definitely be a regional power not to fuck with, along the lines of India and China in the 60s.