This past Olympics had barely started when commentators started commenting on how the People's Republic of China (hosting the next summer games) will react to the possible particpation of their break-away province known to the rest of us as Taiwan.
International tennis always seems to avoid or get around these things. During the apartheid era they happily ignored the Gleneagles agreement, justifying it on the basis that players were individuals and not representatives of their countries. Although this didn't stop them flying the old South African flag at events. I don't expect they'd get away with the Israeli flag in Dubai, though!
On a slightly tangential note, I read last week that Indonesia's leading female player patnered an Israeli in a doubles tournament in India. The Indonesian press mentioned it but didn't make big deal of it, and it didn't seem to cause any backlash for her.