The armed conflict between the Arab world and the State of Israel often seems never-ending, particularly to those who are newcomers to the region's historical record. Israel has had to fight at least three wars against its Arab neighbor in the last decade alone. Two of these were against the Palestinian territories, Operation "Defensive Shield" in the spring of 2002, the 34-day Lebanon War in 2006, and the Gaza War, Operation "Cast Lead" in 2009. "Defensive Shield", far from just a limited anti-terrorist mission, was the largest military operation conducted in the West Bank since the Six Day War in 1967.
Three major wars in ten years, not to mention many minor actions to deter insurgents, seems like a tremendous amount of activity and could lead one to think that Israel's position in the Middle East is fundamentally unchangeable. In other words, that the country's very existence will always foment never-ending war. To a certain extent, this is true. Israel will likely continue to fight wars against its Arab neighbors for decades to come, both of the asymmetric (terrorism and such) and conventional variety.
However, Israel today is in a much better military and national security position than it has been throughout most of its history. Israel still faces major threats to its security, but a detailed look at the country's history over the past 60+ has shown that Israel has utilized a shrewd and cunning mixture of diplomacy and military force to not only ensure the continued survival of the nation, but to a large extent deter future invasions and attacks.
When the nation was founded in 1948, it was immediately attacked by virtually the entire Arab world, with Egypt, Syria, and Jordan providing most of the troops, backed up by Palestinian irregular paramilitaries. For most of the next 20 years, Israel faced down all of the frontline Arab states in addition to fighting off terrorist attacks during the War of Attrition.
At times, it seemed as though total war would continue to consume the region indefinitely. However, the era of constant conventional warfare actually ended much earlier than many analysts predicted. Until 1967, the Arab world had determined that it would make no peace with Israel. All of the major Arab nations, including countries as far away as Algeria and the Sudan, not only remained in a perpetual state of war but refused to even recognize Israel's existence, a dire situation indeed for the Israelis. The Six Day War in 1967 was a total defeat for the Arabs, proving that it would be near impossible to actually threaten the state's existence.
After Anwar Sadat became the Egyptian president in 1970, he was smart enough to realize that completely overrunning the Jewish state was neither a realistic nor desirable goal. He was determined to continue on a course of war with Israel, but with more realistic war aims (recovery of seized lands and recovery of military respect for Egypt) the eventual goal of making peace with them. After the 1973 Yom Kippur War, Egypt had recovered its reputation as a competent (or at least less incompetent) military power, but had still been thoroughly defeated once again by the Israel Defense Force (IDF), which had crossed into Africa and completely cut off an entire field army by the end of the war. Israel quickly seized onto Sadat's peace overtures and eventually signed the Camp David Accords in 1978, gaining recognition of its right to exist from the Egyptians, cessation of the state of war between the two countries, and effectively knocking out one of the two most dangerous Arab combatants (Syria being the second). Wars in Lebanon against the Syrians and the PLO in the '80s further convinced Arab nations of the futility of making open warfare against Israel. Peace with Jordan followed in the late '90s, knocking down another domino in the pantheon of potential threats. The humiliation suffered by Yasser Arafar and the PLO at the hands of Israelis in Lebanon during Operation "Peace for Galilee" in 1982 effectively ejected Arafat's armed group from the country and went a long way towards paving the way for the Oslo Accords in 1993 that ended the PLO's armed campaign.
Thus, through a mixture of diplomacy and force, Israel actually stands in a better, safer position today than it has throughout most of its history. Egypt and Jordan, for the time being, have no desire to make another war against Israel, despite the fact that both have relatively well-trained, well-led and, in Egypt's case, massive ground forces at their disposal. Syria's military is so weak and underfunded, it will take years to completely rebuild and right now a full-scale war would be not only foolish, but suicidal. Iraq is struggling with its own internal problems and, dependent as it is on the United States, would be unwilling to send even token forces to aid in an armed conflict.
Right now, Israel's biggest problems remain insurgent groups equipped, funded, trained, and harbored by Syria and Iran, such as Hamas, Hezbollah, and Palestinian Islamic Jihad. Hezbollah, powerful as it is, is certainly the biggest of these threats. While Hamas is dangerous, they are essentially boxed into the Gaza Strip, which the IDF can invade at will with punishing efficiency, as evidenced in 2009. Since Operation "Defensive Shield" ended, the threat from Fatah-related groups, like the Al Aqsa Martyrs' Brigades, have decreased dramatically.
All in all, Israel is less under siege today than it has been in the past.