According to a State Department cable written in August 2008 and posted on the website of The Daily Telegraph this week, Israeli officials favoured General Omar Suleiman to succeed Egyptian President Hosni Mubarak. "There is no question that Israel is most comfortable with the prospect of" Mr Suleiman taking power, an American diplomat in Tel Aviv reported to his superiors.

That's no surprise. The Israelis have been very nervous about developments in Egypt, fearing that a new government may terminate the peace treaty with Israel. But Israel would not welcome another more likely, if less catastrophic, scenario either: if Egypt were to become more open, as a former American official, Aaron David Miller wrote in The Washington Post last Friday, "diverse voices reflecting Islamist currents and secular nationalists will be louder. And by definition, these voices will be more critical of America and Israel".

Israel is right to be worried, but for all the wrong reasons. In a very profound sense, the country has been living an illusion in the Middle East. It has long assumed that peace treaties with Egypt and Jordan, like those steps leading toward normalisation with other Arab countries, constitute a safeguard against having to address the complexities of an often dubious Arab environment. Here is Israel insisting that it means to be a part of the region by hook or by crook, yet is oblivious to strong popular undercurrents of dissatisfaction with the authoritarian regimes with which it had concluded its bargains.

Successive Israeli leaders wrongly assumed that being of the region was a condition that could be satisfied by dealing solely with Arab political and economic elites, while abandoning Israel's responsibility to reinforce the desirability of peace within Arab societies. Israel has pursued policies with respect to the Palestinians that have convinced a majority of Arabs, rightly or wrongly, that peace is a sham. And Israeli dependency on friendly autocrats only brings home the paradox that peace is a benefit that must somehow be imposed.

Another difficulty in Israel's position has to do with the longstanding belief, inside Israeli society and in the West, that the country is "the only democracy" in the Middle East. That's questionable, but Israel is certainly a democracy for its Jewish citizens. However, the quiet antagonism of the Netanyahu government toward events in Egypt (and any other Israeli government would have reacted in the same way), suggests that the Israelis' belief in the uniqueness of their democracy in the region is self-fulfilling. In other words, Israel is the sole democracy and will ensure that it remains the sole democracy by heading off efforts in Arab societies to achieve the same level of popular self-determination.

That is why Israel was never enthusiastic about the American invasion of Iraq. Some of its American supporters may have seen the Iraqi scheme as a backhanded way of bolstering Israel, and even there the evidence is scant - with most advocates of the theory pointing to a cursory briefing paper written by American neoconservatives for Benjamin Netanyahu in 1996. Ariel Sharon's cabinet never took the war in Iraq as more than a destabilising sideshow, since Saddam Hussein was already well contained by the international community. As for Israel's attraction to Iraqi democracy, it was always nil.

Which leads us to the third problem arising from Israel's doubts about the protests in Egypt. Arab demands for self-determination - whether in Egypt, Tunisia, Iraq or elsewhere - eventually risk casting a desolate light on Israel's denial of self-determination to the Palestinians. Israel has been willing to accept a Palestinian state; of all people, Mr Sharon agreed to pull out of Gaza unilaterally. However, in defending its right to force optimal security boundaries on Palestinian areas, Israel has built and is still building settlements that have turned a prospective Palestinian state into a warren of isolated districts. In other words, genuine Palestinian self-determination is the price that must be paid for Israeli political determination to accept no compromise on its own claims.

We shouldn't be naive. Israel is not alone in fearing an Islamist takeover in Egypt, even if Arab autocrats tend to reserve their harshest blows for liberals, thereby strengthening Islamists. But in what way has Israel done much to put Arab Islamists on the defensive? On balance, Hamas has gained from the Israeli siege of Gaza. In Lebanon this week Israel appeared to have postponed a pullout from the occupied Lebanese portion of Ghajar, presumably because it assumes that a new government in Beirut will be dominated by Hizbollah. Ironically, the Ghajar withdrawal was pushed most heartily by the party's adversaries, who argued that the town's peaceful return to Lebanese sovereignty would prove that armed resistance was not the sole way of regaining occupied land.

By implying that the only reassuring project it sees for Egypt is Mr Mubarak or some other strong man, Israel indirectly fortifies the Muslim Brotherhood. The reasoning may be simplistic, but it has legs: if Israel stands on the autocrat's side, then whoever opposes the autocrat also opposes Israel and is transformed into a purveyor of pluralism. How disconcerting that the Muslim Brotherhood should be viewed in such a light, but that is precisely how some now view it.

Israel's dilemma is not very different than that of the United States. Interests dictate that both countries prefer stalemate in the Arab world to unwieldy pluralism, because stalemate, defined as stability, has done them well. But when stability is a byword for all forms of abuse, suffocation, mediocrity, frustration and arrested development, then something is wrong. No enduring Arab peace with Israel can be built on such foundations, and it's a good thing if the Egyptian protests compel Israelis to start questioning their own short-sightedness.

Michael Young is opinion editor of the Daily Star newspaper in Beirut and author of The Ghosts of Martyrs Square: An Eyewitness Account of Lebanon's Life Struggle