Part of the middle east crisis is that Israel is percieved as being too liberal, which, in this case, is just a euphemism for "western",
But the liberalism of Israel in relation to Arab society is only a small part of the conflict. The fact is that settlers, who the West sees as the main obstacle to peace are mostly religious Jews living a conservative lifestyle. The leftist "peace" advocates who call for giving the palestinians the west bank are mostly secular people who live liberal lifestyles. The Arabs hate both groups equally.
the Bible clearly states many times throughout the Old Testament, it's in the best interest of Israelites to follow God's commandments and not stray.
I agree 100%. There is a dichotomy in Israel. On the one hand there is a tradition of european liberalism. On the other hand there is the Jewish religious tradition. As a young society made up of people from all over the world it will generations to build a consensus on how society should function. I think we should be happy that this process is for the most part non-violent. America, for example, was a country torn apart by different ways of life and it had the Civil War where hundred of thousands of people were killed. France made the move from monarchy to liberalism by having the Reign of Terror. So in Israel we have differences within our society, but I believe that in time it will work out peacefully, and we will have a society based on Jewish religious values, following G-d's laws while being part of the wider world.