Why does the Middle East dislike Israel?
First, the Middle East includes Israel and the people of Cyprus like Israel more or less, so the antagonism is in the Middle East countries other than Israel and Cyprus. While this is still over 97% of the people, it is worth clarifying. Additionally, even in countries where the majority of citizens and even the governments hate Israel, there are minorities who like Israel or are willing to tolerate Israel for various reasons, usually for military arrangements, Islamic Zionism, Israel's general progressive tendencies vis-à-vis the rest of the Middle East, etc. However, these minorities usually do not vocalize their opinions out of fear of being beaten and brutalized by the thugs who "enforce" Anti-Zionist opinions.
However, the reasons why Middle Easterners do not like Israel include:
1) International Legal Violations: Israel has engaged in a number of policies in violation of international law, such as the unification of Jerusalem, the settlements in the West, the annexation of the Golan, etc.. Israel is not reticent for performing such acts and claims that it violates those laws because they are prejudicial to its rights and interests. If other countries did the same, (Iran is a great example), they are sternly reprimanded by the international community and forced to toe the line.
2) Anti-Semitism: This should be self-evident. The Logic goes thus: Anti-Semites oppose any Jewish aspiration to freedom and/or power. Zionism promotes Self-Determination for the Jewish people which is an aspiration to freedom and power. Therefore, Anti-Semites oppose Zionism. Additionally, many people who are Anti-Semitic see Jews as running some sort of international cabal to strip power from everyone else. Equipped with a country, who knows what further havoc Jews could cause.
3) Palestinian Indigenous Rights: The indigenous Palestinians and their descendants are aggrieved that people from abroad would come to the land that the parents, grandparents, and great-grandparents had lived on and worked for as long as they could remember and buy that land from the Ottomans without consulting them. Moreover, these people had a particular agenda to establish a state on the land they called their own. Understandably, the Palestinians, and those who support them, are opposed to the Zionist project for these emotional and political considerations. Additionally, the Israeli Military Occupation of the West Bank Territories and the Blockade of Gaza represents a true legal and humanitarian crisis for Supporters of an Independent Palestine and the Palestinian People.
4) Arab Nationalism: Arab Nationalism as a movement crystallized in the 1930s and came to the political fore in the 1960s. Arab Nationalism is a movement that seeks to create an Arab State or multiple Arab States based on common cultural and historical markers. This movement began to make a tether between Arab cultural identity and Islamic religious identity. This was especially keen in places with large non-Muslim communities because those communities typically worked closely with the European colonizers seen to be repressing the Arab identity. Zionism, which is a movement based on a European cultural identity and a Jewish religious identity was antithetical to the Arab Nationalist movement ideologically and claims territory that Arab Nationalists also claim putting them at odds politically.
5) Islamism: Islamism, the political philosophy that Shari'a or Islamic Religious Law should be the grounds upon which a state is ruled, strenuously opposes any Western-style of government because it does not uphold Islamic moral standards (for example: gays and haram meats are permitted). Israel, as a secular, Westernized State is opposed for this reason. Israel, specifically, is also hated by Islamists for two reasons unique to Israel. The first is that the Jews are the ones in power. In the Islamist conception, only Muslims should be in power in the State and any non-Muslim minorities should have a secondary role if they should have one at all. Second, Israel is situated in territory which used to be governed by Muslims for nearly 1300 years (with a century-long break under the Crusader States). As a result, Israel is considered a usurpation of historical Islamic authority whereas European countries (for example) never had Islamic authority before.
It is worth noting that not all Muslims are opposed to the State of Israel and there are several Islamic arguments in favor of the State of Israel, such as those advocated by Sheikh Hadi Palazzi, Irshad Manji, and Tawfik Hamid. None of these individuals, though, is an Islamist. Of the Muslims who oppose the State of Israel, not all of them are Islamist either, many are Arab Nationalists or have no general political affiliation and oppose the State of Israel for one of the many other reasons listed here. Finally, Islam/Muslim/Islamic is the religion and Islamism/Islamist is the political philosophy; the two are different.
6) Anti-Colonialism: While Arab Nationalism was an anti-colonial movement, the general principles of the anti-colonialism led to a rejection of States based on European values in non-European locations with a large number of non-European (ethnically speaking) inhabitants. This sentiment was felt most strongly towards (South) Rhodesia, South Africa, and what would become Israel. Anti-colonialists believe that Asians and Africans had the right to Self-Determination pursuant to their cultures. However, Rhodesian and South African institutions could and did eventually convert to being African nations (in the true sense of the term) because their racist infrastructure could be reformed. Zionism is by default a government by the Jews and would cease to be Zionist if the Jews were taken out of the leadership position. Thus Zionism catches the ire of anti-colonialists.
7) Political Antagonism: If State A has a lot of wars with State B, State A and B will develop a mutual animosity towards each other and their raisons d'être. There are a number of politically independent or partially independent Peoples and States that came into conflict with the Halutzim (Jewish Pioneers in the British Mandate of Palestine), the Haganah et al. (Jewish Militias), and Tzahal (the Israeli Army).
8) Non-Jewish Holy Sites: Since the Holy Land does not only have Jewish Holy Sites, but also has Christian and Muslim Holy Sites, there is opposition in these communities to Jews having a physical monopoly and control of these holy sites. Therefore, these communities opposed the idea of a Jewish Nation State that could do exactly that.