Israel was in the running at one point: http://www.yesterland.com/worldshowcase.html
Yes, and ditched because of politics.
http://jimhillmedia.com/editor_in_c...ase-never-get-built.aspx#sthash.6afeoGfl.dpbs
Perhaps the saddest story associated with World Showcase's proposed Phase II is the one concerning the Israel pavilion. In November 1980, the State of Israel actually signed a deal to officially become part of Epcot. Joseph Wollf, special officer to the Minister of Finance and president of the Tourist Industry Development Corporation signed an agreement that called for this Middle Eastern country to underwrite the design & construction of a World Showcase pavilion that was estimated to cost $30 - $35 million. What's more, Jeshaja Weinberg (i.e. director of the Jewish Museum in Tel Aviv) agreed to provide Disney with a wide variety of archaeological artifacts. Which could then be put on display in a rotating gallery that was to have been part of Epcot's Israel pavilion.
"So if the money and the artifacts were already in place, why didn't this proposed World Showcase pavilion ever get built?," you ask. Well, that's where things get kind of vague. Though there were signs in place on Epcot's opening day trumpeting that the Israel pavilion was "Coming Soon," by October 1984, there was no sign of this previously-announced World Showcase addition.
Steve Baker (while speaking with Vicki Vaughn of the Orlando Sentinel) tried to put the best possible face on the situation. Insisting that The Walt Disney Company had ...

Herbie Ryman's concept art for the shopping district that was to have been built as part
of the World Showcase's Israel pavilion. Copyright Disney Enterprises, Inc.
All rights reserved
... made much progress towards an Israel pavilion, getting the Israeli government to contribute design money and enlisting its help in putting together private sectors funds, Baker said. But "all this has taken five years and we expect lots of changes to occur" before the Israel pavilion takes shape.
To date, World Showcase's Israel pavilion has never made it off the drawing board. Reportedly because many senior Disney Company officials believe that including Israel as part of Epcot would then turn this theme park into a possible target for terrorism. Or - at the very least - a potential protest focal point. Which actually did prove to be the case when - in 1999 - the Arab League pushed for a boycott of the Millennium Village at Epcot due to the inclusion of an Israel Pavilion as part of this 15-month-long celebration.