British media recently made a splash by claiming that Israel was secretly exporting military technology to Moslem countries. Most Moslem nations long Ago passed laws making it illegal for any of their citizens to trade with Israel. The response to the report by Israel and the alleged recipients was to flatly deny that such export activity had ever occurred. There was no proof other than questionable interpretation of British government records (which covered Israeli requests of components used by Israeli firms to build military equipment). While mass media in general and British media in particular are notorious for massaging the truth to get a more sensational headline, Israeli military gear does find its way to Moslem nations.
Iran, for example, has been caught obtaining forbidden (by its own laws and international sanctions) Israeli technology. This is ironic as Israel is a country Iran has publicly and repeatedly sworn to destroy. The key to this scandalous behavior are third party buyers who resell Israeli gear to countries where direct sales are illegal. For example, an Israeli firm discovered that its Internet monitoring software, NetEnforcer, was being sold to Iran via a Danish software distributor. The Danish firm stripped all labels and packaging that would identify the software as Israeli and sold it to an Iranian firm. This software, and similar stuff Iran has obtained from other Western sources, enables Iran to control how most Iranians use the Internet.
Israeli military hardware has made its way to Moslem nations the same way. Israel is one of the top ten exporters of military technology and much of it consists of spare parts for common weapon systems (like F-16s) or accessories (like night sights for assault rifles). The Israeli stuff is noted for its quality and competitive prices, which makes it possible for unscrupulous distributors to mark up the illegal goods and still be able to offer them (under the table, as it were) at a competitive price. In some Moslem countries obtaining Israeli military tech is seen as cool, as the hated Israelis are still admired for their military and technical prowess.
This kind of smuggling employs techniques that Iran has used successfully for a long time. The Western supplier often gets a much higher price to cover the risk of being found out and prosecuted. There are, as the Iranians know well, a lot of Western suppliers who are willing to take the risk. The Danish smuggler of Israeli tech was found out when a former employee of the firm provided incriminating documents to journalists.
There is actually a lot of illegal trade between Israel and Iran (and other Moslem countries), but it usually involves non-military stuff and is often smuggled via Turkey. But with relations between Turkey and Israel deteriorating (because Turkey increasingly backs Arab attitudes towards Israel), this smuggling route is less reliable. There are others, because smugglers always find a way.