Israel has been more successful at espionage in large part because it can offer a larger array of attractive rewards to potential informants in enemy territory. The most valued of these rewards is residency permits for the informant and his family to live in Israel. This has worked especially well in the Palestinian territories, southern Lebanon, Syria, Iran and Egypt. This technique is also used by the United States and other Western nations, but much less frequently. Israel, on the other hand, has brought in over 150,000 Arabs to live in Israel since the 1950s as a reward for useful, and dangerous, efforts as an informant. Once in Israel, the former informants find that life is, despite decades of Arab propaganda, much better and that information gets back to Arabs back where the informants came from (West Bank, Gaza, Lebanon, Egypt, Syria and so on) making it easier to recruit more informants.
Despite this track record of providing valued, and vulnerable, informants with new and better lives, many Arabs (particularly Palestinians) resist willingly providing information to the Israelis. To counter this the Israelis developed the BBE (Bribes, Blackmail, Extortion) System. Actually, BBE uses ancient techniques, but with tweaks to meet Israeli needs. Thus Israeli agents seek out Palestinians who could be bribed, blackmailed or extorted to provide information. This often provides enough information to identify the key people in a Palestinian terrorist organization. The Israelis then stage raids or attacks to arrest or kill these key people. It wasn't just the organizers and leaders they were after, but the "technicians" who could build bombs or carry out other essential, and technical, tasks. The Palestinians called these guys "engineers," and they were a talented bunch. You could note their absence by an increasing number of accidental explosions in areas where bombs are built (like Gaza). Less expert bomb builders make fatal mistakes which often reveal themselves with an explosion in an unexpected area (like a neighborhood controlled by bomb building and using terrorists.)
The lack of leadership means that more and more suicide (and other types) attacks failed. It's not easy staging a suicide attack. The actual suicide bomber is only one person in a team of up to a dozen people who make the bomb, scout the target area and figure out how to get the bomber past Israeli security.
This extensive use of volunteer and coerced/persuaded informants has been the main reason why several Palestinian attempts at terror campaigns against Israel, especially inside Israel, have failed. All those informants are not noticed until you realize that secret plans to organize terror attacks are not as secret as you thought. While there are well publicized (because they are so rare) incidents of Israeli Arabs spying against Israel it is far more common for Arabs in the Palestinian territories, or neighboring countries, to become informants for Israel. It’s become an annual event for Shin Bet, the Israeli domestic intelligence service, to announce how many terror attacks they prevented in the past year. It is always an impressive number and many of these disruptions showed up in the news. Many did not and details of how often informants were key to disrupting an attack are rarely even mentioned.
Israel has expanded its list of acceptable (to potential informants) tactics it can use. It’s not just the promise of an Israeli residency permit. Many of these Palestinian informants are doing it for the money. Israelis pay for information, just like Palestinians must pay bribes to get anything done by their own bureaucracy in the Palestinian territories. Israelis also use other inducements (help with the bureaucracy, medical care, etc.). If that fails, they use blackmail and threats.
Palestinian terrorist organizations have been unsuccessful in their attempts to shut down the informant networks, and many innocent Palestinians have died simply because they were falsely accused of being informants. Worse for Palestinian terrorists, the informer network also exists inside Israeli prisons and many a Palestinian prisoner has found themselves facing another prosecution because of an inadvertent confession they made to a fellow “prisoner” who turned out to be an Israeli Arab with a convincing cover story and believable accent.
In addition, the Israelis gain a lot of information via electronic intelligence work and UAVs that are constantly in the air over Gaza. Israel seeks to make the terrorists think that it's the gadgets, not informants, gathering the information. To the Israelis, inducing paranoia among the Palestinians is seen as a successful weapon. All this has helped keep the terrorists out of Israel for over a decade now, something no one thought was possible.
Israel has also used thousands of police and military operatives who can pass as Arabs. That's because the families of these Israelis came from Arab countries shortly after Israel was founded in 1947. These Israelis speak fluent Arabic (with a Palestinian accent), in addition to their Arab appearance. These agents dress as Palestinians and enter Palestinian areas to recruit and run Palestinian informants, at least in the West Bank. In Gaza, the Israelis use pro-Fatah (the rival group that runs the West Bank) Palestinians. Nearly half of all Israelis are descendants of Jews forced out of Moslem nations and that provides a large pool of Israelis who can pass for Arabs because the ancient Israelites were Semites as were their Arab neighbors who had adopted other religions (Moslem, Christianity and several others that still survive). All these non-Jewish Semites are a recruiting pool for intelligence agents able to blend in. In addition, many agents are recruited from Jews who migrated from non-Arab nations like Iran, Ethiopia and Russia. You rarely hear about this but it is happening, when the enemy least expects it.