You guys all missed crucial part of the challenge. The POD can be any time after 1900. So, as soon as British and their colonial designs are mostly responsible for the mess of Middle Eastern borders as we know it today, let Britons do most of heavy lifting.
1st thing 1st: eliminate Transjordan from the map. That is easy. Just take Abdullah out or otherwise eliminate the need for British to compensate his family for both Mecca and Damascus Hachemites lost. Let him die from a rotten peach or be killed in battle as a noble Arab warrior he was. Once you done it, you have Mandate Palestine covering something like 90% of target area, so to speak. This is not ASB, it is not unlikely, it is just
Now, make British in 1918-1920 serious about giving Mandate Palestine something resembling defensible borders, once it (as had been planned from the very beginning) becomes an independent state (remember, the written purpose of the mandate was to prepare a territory for eventual statehood by gradually building civic society). That means full control over Jordan river’s basin in it’s entirety. Golan heights, Hasbani, Banias, Dan, Iyon, HulaValley, everything. And, since drainage divide between Upper Jordan’s tributaries and lower Litani river makes a lousy border, let Britons get a lower Littani as well (I’m stretching here, as water in this region is more important than land, so it would be a vicious bargaining over who would get Lower Littani area). French would complain bitterly, but they can be either talked into submission or compensated in Northern Syria at Turks’ behalf (after all, losers can only get what they’re allowed and Turks lost WWI). OTL Jordan’s border with Syria is left mostly untouched, it’s just worthless piece of a desert nobody would shed a tear over. Same goes for (purely symbolical) border between OTL Jordan and Saudi Arabia (both decisions could backfire later creating two indefensible open borders, but at least there’s a buffer territory in both cases where mobile war can be waged).
Looking as Mandate Palestine’s South-Western border, we can see an absolutely indefensible gaping wound of OTL Sinai-Negev border. IOTL this wound created an Israel’s endless paranoia about not letting Egypt pick a time and place to attack. Let Egypt pick conditions for engagement, and Israel lost automatically. They only let their guards down in 1973, and only because they controlled Sinai. However, for now we’re looking at situation in AD 1919, not 1973. And in 1919 British can more or less draw the map as they please. Now, they can’t allow two separate (at least nominally) polities control borders of Suez, danger of them quarrelling over, for example, Canal tolls would be too great. However, nobody could stop British at this point of time to draw to draw a border a bit EAST of the Canal (remember, Egypt obtained Sinai just in 1906 from Ottoman Empire under great British pressure, so Brits are just taking back what they’ve given before; again, Egyptians might squeak, but they could be easily compensated in Sudan, for example, or by giving them bigger share in management of British Somalia). Accidentally, there’s a mountain range running parallel to the Canal about 20-30 miles east of it. A defensive “Curzon line” (pun fully intended) build along the mountaintops would, according to 1920s military thinking, alleviate any fears of Egyptian invasion future country of Palestine would have. So, let us have British to draw a borderline along the range. This border adjustment isn’t ASB, again, but, unlike eliminating Jordan, it isn’t likely, as it would require a great deal of strategic thinking on the British side, and Britons aren’t generally great in this exercise.
Now, we created a Great Mandate Palestine with more or less natural and defensible borders, but the challenge is to make it a Jewish state. Here, we’re stepping at ASB territory, as Great Jewish Palestine (i.e. a country incorporating OTL Israel with West Bank, Jordan, Sinai, Southern Lebanon and bits and pieces of Southern Syria) could only appear if British are extremely favourable toward Jewish settlement there, something IOTL they were not. IOTL British tried to appease everyone and ended up disappointing everyone while doing so, leaving the Empire without true local ally it could rely on. But what if they decided to let Jews settle in Mandate in whatever numbers, figuring that a European community in Middle Eastern country would always need British overlords for protection and, therefore, would never betray Britain? Yes, it would alienate sheikhs and over medieval chieftains of the region but those chieftains also depended on British to maintain control, so why should British Empire listen to their whining too much? They would bend to British will, if not out of great friendliness then out of fear of losing the master. In short, something like attitude demonstrated by OTL America in the region. Yes, their Saudi, Gulf and Egyptian allies are bitterly disappointed about American support for Israel, but they had to just swallow it.
So, our cunning and strategically thinking Britons (ASBs were very skilled brain surgeons, methink) are busy in 1920-1933 letting as much Jews as possible in and basically (as they think) creating local enforcer entity to protect British colonial interests. This decision, in turn, creates interesting development in Eastern Europe. Soviets are encouraging (generally very Socialist) Zionist emigration from the Soviet Union to try and create a socialist 5th column in the heart of the British Empire and Poles (very dissatisfied with their Jews) are just itching to send as many Jews out of Poland as possible, and as far as possible. So, by 1933 Yishuv is approximately 2 times larger then IOTL.
Once Adolph and his party start govern Germany, Palestine suddenly becomes very attractive for Polish, Romanian, Hungarian Jewry. After 1939 the river of immigration (pretty powerful in 1933-1939) becomes a raging Niagara. Jews are suddenly possessed by burning desire to visit neutral Turkey and Bulgaria, where they’re transferred on Sohnut’s rickety boats and moved straight to Haifa and Yaffo. Nazis wouldn’t even try to prevent this exodus, as they aren’t up to Babyi Yars and Auschwitz yet, they should be quite happy about Jews just leaving New Aryan Europe for good. So, assuming a timeline similar to OTL (Palestine becoming independent post-WWII), there’s something like 2-4 mils of Jews in Palestine instead of OTL 600K.
Now, most ASBish thing would be Israel getting control over Kuwait, as shown on the map. I could only suspect that Second Great Arabian Revolt to free Land of Islam from poisonous breath of Ferengi (IOTL Rashid Ali uprising, ITTL supported by Saudis and succeeding in scaring British shitless) led to that. Once order is restored (quite possibly, with help of Jewish Legion, armed force of Mandate Palestine), British might decide, circa 1942, that complete territorial separation of nationalist cesspools of Iraq and Arabia isn’t a bad idea, after all, so sheikdom Kuwait , as well as sliver of land connecting it to 1922 Mandate Palestine, had been transferred under Palestinian control (IOTL in 1942 British didn’t consider losing control over the region in next 5 years as something realistic, so why they should ITTL).
Summing it all up, Israel in borders of OTL Mandate of Palestine of 1919 is completely realistic, one incorporating most of Sinai and good chunks of Southern Lebanon and Syria is unlikely but still realistic, but giving it Kuwait is ASB. Not ASB-ASB-ASB of Clansy or Fatherland vintage, but crazy enough…
Dear Grimm Reaper, please realise that I was looking at a 1930s or 1940s POD, as a way of resolving the Palestine Question and giving the Holocaust survivors a homeland. I had to be somewhat brief because of domestic mealtimes. Whether the Zionist kibbutzniks would agree would be up to the wily David ben-Gurion, but it was a sincere attempt to find a genuine solution. Remember that Palestine's lands had been eaten out by hundreds of years of goats before kibbutz experiments reclaimed the land. If you think that the kibbutzniks wouldn't have discovered contour lines of pebbles and damming seasonal rains, then you've less respect for the science of desperation than I do.