David Bernstein at the Volokh Conspiracy has an excellent post about how the Soviet Union's role in fomenting trouble in the Middle East has been flushed down the memory hole:
After Israel emerged victorious beyond its wildest dreams in 1967, the influence of the USSR was apparent in several ways. First, the Soviet bloc led an international campaign of boycott and defamation, larded with anti-Semitism, against Israel, creating a siege mentality that has stayed with Israel ever since, and made it that much more difficult to persuade Israel, already traumatized by the Holocaust and the expulsion of Jews from Arab lands, that the "international community" is to be trusted.
Second, Israel's performance against Soviet-supplied enemies Syria and Egypt persuaded the U.S. that Israel was a regional superpower that needed to be engaged, both to further U.S. interests, and to try to keep the (nuclear-armed) country stable and secure so that it didn't inadvertantly start WWIII.
And finally, while religious fanatics were among the most zealous settlers of the West Bank, a certain level of settlment was supported virtually across Zionist party lines, due to the perceived threat of a renewed Soviet-backed war of destruction against Israel. (In part, this was due to Lyndon Johnson reneging in 1967 on American security guarantees provided by Eisenhower in 1956--Israel saw that the U.S. could not be trusted to guarantee its security.) Israeli military and political leaders believed that holding at least some parts of the West Bank gave Israel the strategic depth to ward off, or even entirely discourage, an attack from the West, which proved prescient when Jordan declined to involve itself in the Yom Kippur War.
In 1973, by the end of the Yom Kippur War, Israel had crossed the Suez canal, had a huge segment of the Egyptian military surrounded, and was prepared, if necessary, to march on Cairo (Juan Cole, displaying his usual penchant for accuracy, calls this a "draw-to-slight victory" for Egypt). Damascus was also within range. The U.S. insisted on a cease-fire, because the Soviets threatened to intervene on behalf of Egypt and Syria.
It is also well to remember the Soviet's support for the nascent terrorist groups that later grew to threaten the entire world:
Throughout the 70s and 80s, the Soviets funded every rejectionist and terrorist movement willing to take money from it. Dovish arguments in Israel were met with skepticism because of the continued role of one of the two superpowers in financing those who called for, and acted for, Israel's destruction. Meanwhile, U.S.-Israeli ties grew closer as the old socialist ethos in Israel gave way to strong anti-Soviet sentiment under Likud rule, and a generation of Israelis came of age--including a few hundred thousand Soviet Jewish refugees--with a Soviet Union sworn to their country's annihilation.
By contrast, the fall of the USSR was one of the major factors that allowed the Oslo negotiations and agreements to move forward. Without the backing of a superpower, Yasser Arafat seemed less like a potential destroyer of Israel and a lot more like a has-been terorist who would be willing to settle for what he could plausibly get. Strategic depth became less important when the Soviet's last major ally bordering on Israel, Syria, virtually collapsed militarily in the absence of Soviet aid.
This story, indeed, would likely have a happy ending, but for the rise of new ideological movement, replacing Communism, even more implacably hostile to Israel--Islamic fundamentalism. But that's another story.
The left and their allies in the media have had a particular blind spot regarding Soviet complicity in deliberately fomenting problems that still bedevil us today. You rarely see them included in the left's favorite parlor game - the "root causes" of conflict that usually blame the US and the west for colonial policies rather than the post-colonial assistance to many Middle East regimes by the Soviets. Their training of Palestinian terrorists is just one aspect of this history that you rarely see discussed anywhere in the media.