I imagine the concern becomes survivability. Israeli's really like their multiple levels of backups, and having a data copy out of the reach of enemy arms seems high priority.
Iran attacking US-East-1 would certainly be unusual.
Iran attacking US-East-1 would certainly be unusual.
More likely is it was "aid" from the US which usually comes with stipulations about what/where they can spend it - common with weapons/military kit, wouldn't be surprised if they did something similar with cloud services.
And any offsite that is "Israel's gov offsite" is an easy target even if in Cyprus or NYC.
Comingling with a bunch of bulk commercial hosts is very safe from a threat modeling perspective (in this case).