I read through nearly 80 pages until i could no longer refrain from posting.
There is nothing wrong with a fictional scenario, but as i understand it people here seem to be asking for a more reasonable/logical (fictional) future scenario and its completely understandable.
First and foremost, it isnt THAT unlikely that in a future world Iran will be using Israeli equipment, far from it... Unlike most of the arab world, Iran's majority seeks to be westernized, making a switch of political regime capable of turning it into one of Israel's future allies. However, as Iran is portrayed in BI fictional scenario it seems like the political regime was replaced with a similar one only stupid enough to approach via direct war instead of using proxies. Modern day Iran doesn't war with Israel directly because they stand not the slightest chance considering they are inferior on all ends. Currently Israel and the Arab world is kinda like the David and Goliath scenario whereas Israel is Goliath with its battle-hardened reserve troops and technological supremacy. Iran is roughly 20-30 years behind in Technology with little to no military experience. Assuming a war breaks out in the modern world, Israel's military experience and equipment is so much more advanced over that of most of the western world that Iran does not have the slightest chance of winning such a direct confrontation, no matter if supported by Russia or by China. (Just for kicks and giggles - http://en.wikipedia.org/wiki/Ofeq)
Second, even if you go around all of the above reasoning - the rate at which new military technologies are developed by Israel will result in FAR more advanced weaponry than the Tavor or the Merkava by 2035, forcing BI to invent newer models based on older Israeli tech.
And thirdly, i wonder how do so many of you compare the Merkava MK IV with any modern equivalent. Are you judging it by maximum speed/turn rate, armor and firepower? if so then you are thinking in WWII terms instead of modern terms. The Merkava is not prized for such specs, but the technological equipment that is mounted on it, making it without a doubt one of the most sophisticated and indestructible tanks the REAL world had ever seen. Here are but a glimpse of the systems installed on the Merkava MK IV:
1. The Iron Fist/Trophy APS, having no equivalent in the world, are a passive defense system that is capable of giving the Merkava the edge over any modern tank on its own.
2. IP Mobile Network Software (Rafael's BNET), allowing the tank to receive live feedback from any other vehicle, infantry, UAV, fighter jet and naval fleet around or even relatively far away. (http://www.rafael.co.il/marketing/SIP_STORAGE/FILES/6/1246.pdf)
3. Every Station has full control of the tank, allowing the commander assume the driver's role from his own station in case the driver is killed and vice versa. Every station in the tank can be assumed control of via another station.
What makes it even more unlikely that the Merkava MK IV will be used by a foreign military is that the edge of the Merkava over other tanks is the dozens if not hundreds of high-tech systems that are interconnected with the Merkava's. That is why for the Israeli's selling it abroad is out of the question, to sell it you'd have to sell the many systems that are used by the Merkava as well as the Merkava being part of. What if i tell you that there are systems that can be installed on the Merkava, allowing it to launch 15km range drones that transmit direct feedback to it?
Yes, i've seen the inside of the Merkava, seen it on live demonstration and have several friends who operated in one during the recent wars. Unlike the Tavor, there is no logic what-so-ever behind its use by any foreign military, none.