> it has something to do with Israel being an ally
There are many allies of the US, still they are not exempt from the Non-Proliferation Treaty (NPT). I'm not sure if it's a sane strategy to permit a single ally who has never signed the NPT [1] to build nuclear weapons, unlike your many other allies or non-allies:
> The roots of this preferential treatment go back to a secret 1969 understanding between U.S. President Richard Nixon and Israeli Prime Minister Golda Meir. The agreement essentially allowed Israel to keep its nuclear weapons as long as it remained silent about them and avoided nuclear tests. That bargain has held ever since, with successive U.S. administrations turning a blind eye to what would be a clear violation of international norms if committed by any other state.
Causing a power imbalance in the region doesn't seem the right way to keep peace.
"terrorism" is just war fighting that we don't like. Israel is by far the biggest aggressor in the middle east having bombed half a dozen countries in the last year.