It saddens me to see everyone scapegoat Israel for the problems of the Arab world. Somehow if you make Israel go away they don't turn to radical Islam and embrace democracy? Nah, I don't think it's that easy, sorry. Stop falling for the Muslim red herring that Jews are the problem. Look internal, not external. Turkey, albeit a Muslim not an Arab state, has done just fine (until recently) on being a secular state. Albania has finally started doing ok... though a giant pyramid scheme right after decades of communism didn't help, it had nothing to do with Israel whereas the majority of the population that acknowledges a religion is Muslim. The problems the Muslim Bosnians have had since 1991 has nothing to do with Israel. Might as well blame Greece's economic problems on Turkey existing and claim a PoD where Greece wins in 1923 butterflies away Greece's current debt problem!
Sorry, but Zionism is not the problem that caused Arab instability and recklessness, but anti-Zionism has been a major contributor (eg- constant warmongering, loss of life, constant military spending, et al has contributed to a worse economy). It isn't the fault of Israel existing that can cause anti-zionism to not happen, it must be the underlying economic and cultural attitudes that allow an anti-zionist feelings themselves to occur that must be butterflied. Otherwise you simply shift to anti-Turkish, anti-Iranian, anti-Druze, anti-Sunni, anti-Shi'ite, anti-Kurdish, anti-Christian, anti-Jewish, anti-Armenian feelings. Saudis will still hate Iranians, Iranians and Iraqis will still hate, Kurds and Turks. PoD of no Israel doesn't even get rid of good sized Jewish populations in Egypt, Yemen, Iraq, and whatever you're going to call Israel. Palestine was a Jewish name for the land prior to 1948 and Palestinian was the name for the Jews of Palestine, and without an Israel you don't have a Palestinian identity as that name for Arabs in that territory.