Is Israel Israel?

My question here is, is the present day nation Israel actually prophetic Israel? Many say it is. Many preach that it is, e.g., John Hagee and John Ankerberg. But how does it really fit with Bible prophecy?

Some have used Isaiah 66 as proof. Indeed, modern Israel was formed in a day. May 14, 1948 if my memory hasn't failed me. It was in May of that year at any rate. This fulfilled the Balfour Declaration of 1917 if not prophecy.

Isa 66:8
8 Who hath heard such a thing? who hath seen such things? Shall the earth be made to bring forth in one day? or shall a nation be born at once? for as soon as Zion travailed, she brought forth her children.
KJV

As well, Israel's victories in war can be considered as proof that God fights for this current nation as he did for the children of Israel in Joshua's day. Or can they?

Josh 10:42
42 And all these kings and their land did Joshua take at one time, because the Lord God of Israel fought for Israel.
KJV

Along similar lines it's been said that Israel's signing a pact in 1993 with Yassar Arafat was a fulfillment of the "covenant with death" scriptures. Was it?

Isa 28:14-18
14 Wherefore hear the word of the Lord, ye scornful men, that rule this people which is in Jerusalem.

15 Because ye have said, We have made a covenant with death, and with hell are we at agreement; when the overflowing scourge shall pass through, it shall not come unto us: for we have made lies our refuge, and under falsehood have we hid ourselves:

16 Therefore thus saith the Lord God, Behold, I lay in Zion for a foundation, a stone, a tried stone, a precious corner stone, a sure foundation: he that believeth shall not make haste.

17 Judgment also will I lay to the line, and righteousness to the plummet: and the hail shall sweep away the refuge of lies, and the waters shall overflow the hiding place.

18 And your covenant with death shall be disannulled, and your agreement with hell shall not stand; when the overflowing scourge shall pass through, then ye shall be trodden down by it.
KJV

So, is this Middle Eastern country, in existence since 1948, there because of God's doing? Is it an entity that Bible prophecies apply to? Can it be used, maybe, to clarify end time eschatology? Or is it just a creation of the British Empire, brought forth for political reasons, rather than being something brought about by God?

Right now I don't know. Is Israel Israel? Maybe so; maybe not. But I get concerned when people, like TV evangelists, TV news people, and even the United States congress, tend to excuse apparent atrocities committed by Israel (e.g. the Goldstone report). Also, there's considerable pressure for a war with Iran, and I, for one, would not want us in such a war from having been influenced by a wrong premise. This question is important. It really deserves study, taking scriptures in context, looking hard at prophecy.

It's something I plan to continue with. Insights and comments by readers will certainly be appreciated.