The dictator's of the Muslim world don't want normalized relations with the Zionists because without the Israel scapegoat card to play, the citizens of the Muslim world will revolt, demand fairness, and probably lynch the dictators.
If Israel didn't exist, the Arabs would need to invent it in order to deflect from their own miseries, failures and regressiveness, and, have someone to scapegoat.
NY times writer Thomas Friedman would mock the Muslims as they obsess about Israel 24/7 while remaining in a7th century cesspool, when Israelis have more technology companies listed on NASDAQ than any other country, except the US.
The Muslim world is also an avid consumer of antisemitism, having eclipsed Europe many decades ago. Why should a Muslim country accept an Israeli state when it asborbs all the hate and rage of the media, the left, UN, etc...
Without Israel, it is likely the world media would spend far more time covering the rights abuses of the Islamic world.
But instead, whenever a Palestinian trips over a rock, BBC calls it genocide - and when 5 christians get decapitated by Arab League-sponsored al-shabaab in Somalia, not even a whimper.