Yes, Jewish fundamentalism is a huge problem in Israel. It's holding the country back from being more progressive in the name of preserving tradition. It's also a major reason why they can't seem to move on to resolving conflicts with the Palestinians. Having witnessed Jewish fundamentalism first hand, they make Muslim extremists look like hippies in comparison.
I think anything that points to a more military based solution is a problem. you cant have religious factions that considered violence to be the answer. Its already a place that is steaming with issues. I know that the last thing they need is more conflict, its gone on way to long.
The Jewish fundamental movement is as problematic as is any other fundamentalist movement in any of the other religions. There are Jewish people from all over the world who go to Israel and who do not feel welcomed but instead feel judged because of the hostile way some of these fundamentalists behave toward them.
Fundamentalists from any faith is a nice way to say extremists. There are fundamentals to faith that don't typically cause problems such as the ten commandments from the Christians. These are typically simple to follow and don't cause problems. However, fundamentalists take things to the extreme, like the Muslims who claim a Jihad against anyone who is different and competition. Fundamentalism, or Extremism never results in peace and harmony. It always begins a conflict and often wars.
Anytme you have a group of people who believe in a specific thing, whether they be jewish, christian or muslim, there is potential for problems. Fundamentalism tends to pull people apart and make solutions to serious problems impossible. I think jewish fundamentalism illustrates this and there are many problems in Israel because of it.