Like Iceland, Dubai tried to expand too fast, until boring old reality caught up with it. Sooner or later, people will not finance debt without reward.

Meanwhile, Israel plods along with its mundane officials ensuring that the essentials are done right. Hence, the encouraging growth predictions from the Treasury, the IMF, Barclays Capital and others for 2010.

So why are most Israeli financiers rather amused at the Dubai fiasco? Well, first of all, because of the malicious Arab Boycott, officially Israelis are not allowed to conduct affairs with Dubai. Just speak to tennis player Shahar Peer, who has been banned from taking part in competitions there.

So, maybe the view from the Holy Land is that these guys are getting what it deserves.

On the other hand, business encourages any politicians, including those from Dubai, to be hypocrites. Today’s Israeli press reports of Kibbutz Afikim and maybe a dozen other agricultural companies that have or are conducting commerce in the country. I have a Jerusalem friend, who regularly travels there to go to exhibitions, where he meets other Hebrew speakers. etc etc etc.

Yes, Israel’s wealthy have bought interests in Dubai and will suffer, at least in the short-term. Lev Leviev has a flagship diamond shop in Dubai. Yes, Israel’s stock market will dip temporarily in sympathy with its rivals around the world.

Actually, the most interesting effect on Israel may come through the back door. It is estimated that up to 100,000 Palestinians are in danger of losing their jobs and being thrown out of Dubai. I wonder where they will go?