The Zionist dream was to have a secular state free of frum Jews and independent of the goyim. At present it is losing on both point. Demographically, Hareidim are “drowning” the Zionists (and unlike many Palestinians who choose to emigrate, living elsewhere is not so attractive to Hareidim). Being independent of the goyim is still possible, but the secular Israelis won’t make the economic sacrifices, and the Hareidim aren’t anxious to incur hardship for a medinah whose leadership sees frum Jews as their misfortune.
But it could change. If frum Jews start to takeover, they would be willing to settle for a much lower standard of living. And as Israel becomes less westernized (i.e. more frum), it would be easier to ally with non-Jews in the Middle East who oppose the Iranian/ISIS/al Queda/Muslim Brotherhood brand of political Islam.