I was in Manhattan a couple weeks ago, and it was positively mellow compared to here. It can take a toll on raising a family. Horovitz writes at length about how he and his American-born wife agonize and argue over whether they should be raising their children in such a difficult country. Safety-wise, other places can be better. In the book, he writes of his wife giving their youngsters a casual talk about what to do if they're near a bomb blast.
Military service awaits almost everybody.
Moreover, everybody still has to live together. Israeli businesses employ a large number of Palestinians, who often have to cross several checkpoints to get to work. Ultra-Orthodox Jews tend to keep to themselves, but have considerable influence in creating laws. In a country as small and densely populated as Israel, it's enough to create a lot of friction even when nothing is happening on the peace front. He also worries about the always-fragile state of compromise.