I’m not sure if they still do but you used to be able to hold two passports simultaneously. One that was ‘clean’ for countries that didn’t recognise Israel and another for Israel.
Differs by country, but certainly true some places. Norway for example allows you to apply for a second passport, and the need for a "clean" one is one of the valid reasons you can give.
I meant citizens of the other countries that don't have diplomatic relations trying to go to Israel. They only have one passport and would be in trouble if they visited as their passport would be stamped, thus the scheme of a separate document. Meanwhile, the government buys things from Israel that transit via some nearby country to "simplify imports" through "creative incoterms" and naming and all.