From teaching in Oman, I remember how the GCC was loathe to allow Iran as a persian and shia country, into a gulf arab and sunni muslim economic union.

That being said, the GCC never formed a central bank, or union of any kind. Most wanted to keep their own currency. Egypt/Iraq/Jordan, were great arab countries in the past, even tried to form the arab republic, but I doubt that will ever happen.

Israel is a constant for democracy and technology in a region that sorely lacks it IMHO.