Yet I don't believe that the extent of balancing we observe in today's Middle East is all that puzzling. Furthermore, it seems to me that even ideologically opposed states are responding just as we would expect them to given the specific kinds of threats that Iran poses to them.
First, Israel, Turkey, and Saudi Arabia are already deeply engaged in both external and internal balancing, the two primary forms that Schweller says we should not observe in cases of underbalancing. Externally, Turkey is a NATO member, and both Israel and Saudi Arabia can lean on U.S. help in case of those classic forms of aggression that live in the alliance wheelhouse. At the recent Camp David summit, President Obama "appeared intent on leaving no doubt that any Iranian effort to threaten or attack the Gulf countries directly would be met by a U.S. military response."
Internal balancing, too, is difficult to ignore. Here is one of many similar conclusions in a summary of defense spending datasets by Anthony Cordesman for the Center for Strategic and International Studies:
Saudi Arabia, alone, spent nearly $56.5 billion on its military in 2012, compared to Iran’s $10.6 billion. Collectively, the GCC spent nearly $98.5 billion on their militaries, outspending Iran nearly 10:1. This spending superiority allows the GCC to invest in newer technology, weaponry and defense acquisitions.
Second, once we specify the nature and scale of the threats posed by Iran, we see that traditional alliances may not be the answer. John Hannah identifies a common view of the nature of Iran's regional activities:
Truth be told, the odds of Iran launching a conventional assault across the Gulf are low, all things considered. Why risk triggering a direct confrontation with a vastly more powerful U.S. military, after all? The far more likely scenario: covert penetration and interference, subversion, sabotage, terrorist attacks, and local proxies instigating destabilizing acts of civil unrest and low-level violence. Those are Iran’s preferred tools. Where possible, its modus operandi has generally been to keep its hand hidden, its role plausibly deniable.
We may also be overestimating the scale of the threats Iran poses through its cross-border activities, according to Paul Pillar. He faults commentators for dropping terms such as "subversion" without much in the way of specifics, and counsels that we focus more on what exactly Iran is doing in the region rather than resorting to vague descriptions that sound well enough. For instance, he argues that those who frame Iran's regional activities as "destabilizing" are missing how counterproductive the actions of Saudi Arabia, Israel, and the United States have been in comparison. Still, leaders in the Gulf and in Israel who lack Pillar's dispassionate streak seem to perceive Iran as ascendant as a result of its regional interference, meaning that it is still sensible to think about threat-induced balancing.
Taken together, the existing structure of defense relationships, the history of disproportionately high defense spending by Iran's rivals, and the nature of the threats mean that there is not (yet) much demand for a strong regional alliance. In addition, even governments with highly discordant political ideologies are willing to work together in ways that are tailored to the many unconventional threats that they perceive coming from Tehran.