I hope this thread or argument doesn't blow up into Qantas's decision equating to a position of anti-Israeli / anti-Semitic
A quick Google (including on FT) seems to throw up some positive (i.e. nothing to worry about, particularly if it is just a transit - not stopover requiring passport control) experiences. Suffice to say, many anecdotes I've read people carry two passports (i.e. Israeli one and another one, e.g. US, UK, Australian, etc.), which seems to account for any possible problems. That said, I've seen an article which suggests that even Israelis using another passport have been "caught" in the UAE and faced consequences similar to if they had tried to enter with an Israeli passport.
Also suffice to say, there are no one-stop options anyway for people passing through Dubai going to Israel.
There is an additional layer of complication between someone with an Israeli passport or someone with a non-Israeli passport, but with a record of having been to Israel.
The broad brush conclusion of all the evidence on the web seems to suggest that the jury is out whether people on Israeli passports can safely transit through Dubai.
I don't know if anyone has access to the visa advice used by IATA etc. (can't remember its name, starts with T, I think) to seek out the rules.