I don’t think anyone follows #2. Nobody views it as Malchus. Do I look at it like Peru? No, because Peru has no kedusha to it. Israel is a holy land, and historically the land of the Jews. Do I believe we have a divine right to have it now? No, that will come with Mashiach. That doesn’t mean we can’t have it now as long as it was done properly, without fighting – which it was, through diplomacy.
The land? The land belongs to us, always and forever. I’m not talking about the land, I’m talking about the institution.
Is the institution Kadosh? Lets say it was replaced in a method like the Glorious Revolution of 1688, and a new form of government came out (for arguments sake, more of a loose federal system like the Swiss, with states/cantons). Would you care, assuming rights are protected and no blood is shed? If not, you have no specific “loyalty” to the Medinah (which is what Health is currently rapping against, the institution). If yes, why?