Also, I can't believe that Google or Amazon would sign a contract that doesn't specify the judicial jurisdiction. If the contract says "this contract will be governed by the courts of Santa Clara County California" and the Israelis agreed to that, then they won't have a claim in Israeli courts. If an Israeli court concluded that they have jurisdiction when both parties agreed they don't have jurisdiction, it'd create a very problematic precedent for doing business with Israeli companies.
Even if an Israeli court would ignore all that, what would Israel get? Maybe it could seize a billion in assets within Israel, but would that be worth it? For Google or Amazon, they face steeper penalties in the US and Europe for various things. For Israel, maybe they'd be able to seize an amount of assets equivalent to 10% of their annual military budget. So while it's not a small sum, it is a small sum relative to the parties' sizes. Neither would really win or lose from the amount of money in play.
But Israel would lose big time if it went that route. It would guarantee that no one would sign another cloud deal with them once the existing contracts expired. Investment in Israel would fall off a cliff as companies worried that Israeli courts would simply ignore anything they didn't like.
The point of these agreements is that Israel needs access to cloud resources. The primary objective is probably to avoid getting cut off like Microsoft did to them. That part of the contract is likely enforceable (IANAL): Israel does something against the ToS, but they can't be cut off. I'd guess that's the thing that Israel really wanted out of these deals.
The "wink" was probably a hopeful long shot that they never expected to work. But they got what they needed: Amazon and Google can't cut them off regardless of shareholder pressure or what they're doing with the cloud no matter what anyone thinks of it. Suing Amazon or Google over a part of the contract that they knew was never going to happen would jeopardize their actual objective: stable, continued access to cloud resources.
