there were Israelis among the bid team and the sponsors.

There were no Israelis on the bidding team.

The question of the Arab-Israeli conflict was never raised and it was deemed totally irrelevant.

That's not true, there were questions raised about the safety of Israelis in Egypt and Egypt's attitude towards Jews, and in the greater context of the same problem (politicizing Wikimania), there was a huge storm raised about Human rights record of Egypt, Dictatorship rule in Egypt, treatment of women, LGBTs rights in Egypt, etc, etc.. The discussion spanned meta, irc and mailing lists. So, if you are getting only a couple of boycott canvass messages every now and then, you're lucky :)