Sorry I didn't mean to imply I expected it would degrade to such a point that Israel is actually seizing the assets, it's more I'm pointing out that there's a credible threat of sizeable costs. Compounded with that the real teeth of the espionage laws outside of Israel will be in imprisonment which won't likely apply in these cases if the principal actors are Israeli citizens and the people subject to the foreign law are "doing all they can" to go along espionage orders once they receive one. The point is to get the contract in place in such a way that those who can get punished in a jurisdiction have plausible deniability and profitability to absorb any likely financial penalty by foreign actors. So that everyone just goes along with it as they're not breaking any laws at the time and then later they know their best efforts will be futile.

The Cloud doesn't just mean foreign data centers it means 3rd party infrastructure and expertise, which in this case at least, some of is local to the country. The point is that any 'secret' surveillance is reported. I.e. person in US gets ordered to access data, they connect to data center with appropriate credentials, which is monitored and either questioned and billed, or get flagged locally as not reportable and so not logged (making it show up on the shadow logs installed by local Israeli intelligence assets). Foreign employees best efforts to comply with espionage orders still reveal their actions and local employees happily obey local reporting laws knowing they are outside of those jurisdictions and helping their country.

Yes it can be forced to fall apart, but it has to be done in the open (because it will require changing local data center operations) and will be time consuming unless an actual open order by the US to immediately stop working with Israel on this which is extremely unlikely to happen.