The F-35 is over a generation later than any aircraft operated by the IAF. The integration of airframe, electronics, sensors and emitters is very tight and critical to the maintenance of it's stealth characteristics. Israel wishes to reduce the foreign content by installing it's own electronics, especially ECM in the aircraft. While this makes sense in a monetary and nationalist light, it does not necessarily make sense in a military perspective. Such tampering could reduce the effectiveness of the aircraft and will most certainly delay it's entry into service. It could well be a trade-off between foreign exchange and higher overall costs.
Defense Ministry says had no knowledge of alleged improper defense deals by Gal Hirsch (Haaretz)
from the article: U.S. may allow Israeli upgrades to F-35 fighter jet