I understand that it would be galling to jihadists for Israelis to be a major voting block (at least 75,000, but possibly much more) in Iraq's election, but I still think it is unreasonable to exclude them when people in all the other countries get to vote. Excluding them is a way of saying, "Jews are not real Iraqis," even though it appears there were over 130,000 Iraqi Jews who fled to Israel a generation ago.
It is an inherent risk in a democratic election - especially one that allows voting from outside the borders, as most do - that some feared foreign interest could get a share in the vote and undermine the purported national interest. There was a risk (small, but still a risk) when our country was founded that "Tories" or loyalists could vote to turn America back over to its colonial rulers; or that millions of Muslim-American voters today could force a change in our foreign policy (like our support of Israel). The risk that Iraqi Israelis would engineer something crazy, like annexation, is even more remote.
But this risk carries a benefit as well, especially in an era of globalization. Healthy freedom for immigration, combined with democracy, means that there is a voice in the electorate calling for good relations with other countries. It stabilized the Middle East for several years after Anwar Sadat made a peace treaty with Israel at Camp David. It would greatly stabilize the Middle East if the country that is potentially the strongest militarily and economically (Iraq) could engage Israel seriously. In understand that Al-Qaeda would hate this. But maybe this would give them an incentive to "get out the vote" on their own, instead of threatening to sabotage the election. Our country was deeply divided in the last election, but the benefit is outstanding voter turnout, and a challenge for the losing party to convince more people to vote for them next time.