There's an obvious way for the Arab states to avoid this conundrum: go to war to save Gaza, not to destroy Israel.Yeah this is true, but it won that war conventionally. If it started losing bad it would have used them. The same applies here; I don't expect Israel to use them immediately, but if the state's existence started to be imperilled then it would, and that is what keeps the Arab states out.
Besides, in the first days of the 1973 war Israel felt that it was losing, and it still didn't use nuclear weapons.
Now don't get me wrong: I'm confident that Israel would have resorted to using nuclear weapons had Egypt, say, reached Be'er-Sheva and started slaughtering its Jewish population. I'm just suggesting that the threshold for nuclear use is actually quite high - indeed, much higher than most people would assume.
I feel the same way about the prospects of Russian nuclear use in Ukraine. Or of nuclear use by either party in an eventual Sino-American war.