What’s more likely, an Amazon owned company blocking Israeli accounts on moral/ethical grounds or some backend technical reason? My guess is the latter…
Or one employee being an activist and sneaking in a config change.
Up until recently support responded to tickets of people asking why they couldn't sign up telling them they were forbidden to join. So it was at least semi-official and allowed as a reason for closing support tickets.
If we’re getting specific, a botnet in the region creating accounts might trigger a precautionary lock down like this.