Facing US lawmakers on Capitol Hill in late May, Israeli premier Benjamin Netanyahu did not even attempt to wrap an elegant coating around his undiplomatic mocking of the uprisings sweeping the Arab World. Comparing the current situation in many Arab states to Israel, he left nothing to the imagination.

“My friends, you don‘t need to do nation building in Israel. We have already built,” Netanyahu said, as the lawmakers joined him in laughter. “You don’t need to export democracy to Israel. We’ve already got it.”

Israel has been frequently criticized for its often skeptical welcoming of the pro-democracy demonstrations in the Middle East at large and, in particular, Egypt. But the picture is more complex and varied than Netanyahu’s belittling remarks suggest.

Israeli hesitation is connected to a concern of growing Islamist influence in a post-revolutionary Middle East, and a fear of a more hostile regional environment. In defense of such an outlook, many Arabs have called for the annulment of the 1979 historic peace treaty between Egypt and Israel.

Both Israeli leaders and intellectuals, including president Shimon Peres, have, nevertheless, welcomed the wave of transformation, hoping more representative governments will bring positive changes. Other Israelis, like previous human rights activist Natan Sharansky, have been vehemently supportive and encouraging.

“To those millions crossing, or waiting to cross, the line into freedom, we can send a simple but thrilling message of support and solidarity: We are with you. No dictator is a legitimate representative of his people,” Sharansky recently wrote in an op-ed, published in the New York Times.

Sharansky, who spent his years in Soviet prisons on charges of espionage while playing imaginary chess games in his head, is a former prominent political figure in Israel. He ascribes to what he calls the Hyde Park litmus test of democracy: Whether or not a citizen feels fearless and free enough to simply get on top of a chair and speak his mind in public. And today many Arabs, who no longer show fear for their regimes, are hypothetically doing just that.

Sharansky and his supporters have often been critical of peace initiatives vis-à-vis Arab countries, saying that as long as Arab rulers were not chosen through transparent elections, their oppressed populations would not view any peace agreement as legitimate. Today these intellectuals feel vindicated - both with regard to the brutal oppression of Syrian President Bashar al-Assad and even with the post-revolution calls in Egypt to cancel Anwar Sadat’s decades old peace agreement.

But a competing school of thought prevailed in Israel that said it would be too dangerous to wait until Israel’s neighbors turned democratic, and, furthermore, that it was none of Israel’s business to deal with the nature of the Arab regimes. Today, though, a more rejectionist policy has taken over, claiming Israel can’t risk relinquishing more land, since “Arab states, democracies or not, are not ready to accept Israel as part of the Middle East.”

But this is hardly the view among most intellectuals in Israel. While many welcome the Tahrir Square uprising, they still emphasize elections alone do not sufficiently turn a country into a democracy. And they are waiting to see the next crucial steps take shape.

One hope is that the pro-democracy forces will pave the way for an opening of Egyptian civil society, and create a stage for a new, freer debate in this most important of Arab states. A government-restricted public debate is viewed as hampering the possibility for healthy self-criticism, a necessary precondition for any real societal progress.

According to Israeli historian Shlomo Avineri, the development of a new public discourse may positively impact the prospects of peace in the Middle East.

“The democratic winds beginning to blow in the Arab World should raise the hope that one of the next steps after Tahrir Square will be the development of a critical discourse - the beginning of liberation, not only from autocratic regimes, but from the inability to take a good hard look in the mirror,” professor Avineri, an expert on European Socialism, wrote in the Haaretz daily newspaper.

The common view in Israel is that both regime and oppositions groups, like the Muslim Brotherhood, have avoided taking responsibility for policy by demonizing Israel. Using Israel as a convenient scapegoat has, according to this view, not only hampered the chances of coexistence, but also halted development in Egypt, by deflecting responsibility onto others. And the hope is that a new healthy debate would remove Israel as a scapegoat, and weaken negative stereotypes of Israelis.

And the very fact that the Tahrir Square uprising successfully ousted strongman President Hosni Mubarak is an indication that Egyptians might no longer allow their governments to evade that responsibility. Nevertheless, to many Israelis, the arrest earlier this month of American-Israeli law student Ilan Grapel in Cairo has become a test of post-revolutionary Egyptian society. The widely held perception in Israel is that 27-year old Grapel is no spy at all. And attempts by certain groups to connect him to clashes between Copts and Muslims are received as sad signs that even the new rulers in Cairo might find it fortunate to “continue blaming the Zionists for their own problems.”

Even so, the connection intellectuals like Avineri make between a new “discourse” in Arab countries and the prospects for peace are rather tangible: An end to hostile conspiracy theories that often flourish in countries without a free press, followed by the willingness to go beyond the more simplistic views of the Israelis.

But according to professor Avineri, the crucial regional gain of a more democratic milieu following the “Arab Spring” lies elsewhere. Avineri believes Palestinians, in particular, have for generations avoided a necessary debate toward their leaders’ ”historical mistakes,” both in 1948 and since. And as a consequence, the argument continues, the leadership and the people are still unable to come to terms with the 1948 military defeat and the establishment of the Israeli state.

However, based on Israel’s own experience, the development of democracy is far from a guarantee for peace. Israel has ignited, at mnimum, two of the major wars in the Middle East - the attack on Egypt in 1956 and the invasion of Lebanon in 1982. And, today, an elected government rules Israel that seems unwilling to make the hard decisions a peace solution demands.

King Abdullah of Jordan last week fiercely condemned those hard-line sentiments of the Israeli public opinion.

“I think you have the right wing and the hard right wing in Israel, and everybody has moved by so many degrees,” the king told the Washington Post. In Israel, however, his criticism was portrayed as yet an example of “blunt hypocrisy,” saying that “people in His Majesty’s undemocratic kingdom aren’t even allowed to voice their opinion.”

In Israel, too, it is apparent the coming months could indicate if the Arab democracy uprisings will sow the seeds of a more lasting peace in the Middle East, or the opposite - a beginning of an era of higher tension.

Yossi Klein Halevi, a well-known Israeli commentator, does not believe his country, in a future post-revolutionary Middle East, will win much sympathy. Nevertheless, he seeks to explain how the fatal choices facing the Israeli side are complex, and that “reality” does not boil down to simple black and white imagery. Trying, at least, to create an understanding of the Israeli dilemma, he wrote an article in the New Republic, an American publication, describing what he called the new “ambivalent Israelis.”

“It has nothing to do with uncertainty or confusion,” explained Halevi. He then emphasized how the establishment of a Palestinian state was a clear necessity for Israel’s survival as a democracy. But, and here was the catch, the establishment of that state would also be an existential threat - forcing Israel back into a narrow 13-kilometer wide border between the Mediterranean Sea and Palestine.

“And to be an ambivalent Israeli is to be torn between two conflicting certainties,” says Halevi.