Refusal to allow to sue on grounds that they are already regulated by the government ministry is basically saying their client list/operations is approved by the government ?

It's basically just that the Israeli ministry of defence has to approve their sales because the software is classified as a weapon.

You can't conflate that with the company being an extension of the state though, as the GP did.

They're separate entities with separate objectives. A reasonable comparison would be to Lockheed Martin or Raytheon in the US.

Regulation is to approve the sale to specific national governments. Not just a genetic you can sell or not permit.

Lockheed Martin is not going to sell to China right ? So saying say for example sales of weapops to Saudi Arabia used to kill civilians in Yemen is not supported by U.S. does not hold water. US also absolutely is responsible for any weapons being sold to countries with questionable government and human rights practices

In both cases they are complict and responsibile for failing to regulate adequately. Israel is additionally responsible as they are also shielding the company from being sued.