The Israeli government and people, inspired by the capitalists in the west have realized the utility of appealing to unverifiable religious platitudes that offer such high rewards for their allegiance. The government knows this, and encourages it actively. The brutality visited on the Palestinian children by these fascist devils should be proof enough. The largest tragedy is that there is no God to punish them.
I don't think that there is any evidence to really support the assertion that Israel as a nation is falling victim to fundamentalists. It is a country with a wide variety of problems and issues to tackle, and it tends to have a hard nosed way of going about solving these things.
Israel is not "succumbing" to anything like that. The very foundation of the nation is Jewish fundamentalism, and to call it succumbing is like saying a dog is succumbing to being a canine. Israel has every right to stand on a basis on Jewish fundamentalism. It does allow certain liberties, but that doesn't change who they are.
I think there has been a some increased support, but that doesn't mean the country as a whole has succumbed to it. If all Israels really were to become more violent and wanting war instead of peace, they would loos what little support they have left. The country can't survive without help, because of all the opposition in the area. I think that most of the people know that their only chance for survival is peace. Now this doesn't mean they shouldn't have military to defend themselves and even a huge strong military may be what is needed as a DETERRENT to war.