Israel has a disproportionately large military because it needs one to survive. Do I need to make it any clearer?
As for your claim that they have the largest military in the Middle East:
active reserve
Iran 845,000 1,145,000
Turkey 514,850 380,000
Egypt 450,000 254,000
Syria 296,000 132,500
Iraq 273,618 0
Saudi Arabia 199,500 20,000
Greece 177,600 291,000
Israel 176,500 445,000
Note that I included Greece just for illustration: We all know what a powerhouse they are.
Per capita Israel has more active and in reserve than anyone else in the ME, yet still fewer than say, South Korea.