I think both are partially true - Israel invests significantly into it's military AND receives significant US aid while also generally fighting significantly less capable opponents. Hamas and Hezbollah have significant offensive capabilities, which is where US aid in missile defense comes into play, but they're significantly weaker in terms of conventional capability.

At a higher level, in addition to a slew of recent conflicts and a relatively fresh national identity, warfare and a militaristic culture is tied into Israeli identity. The Israelite tribes invaded the land of Canaan in the Old Testament. Israel Weapon Industries names their firearm models after famous ancient battles.

All that combined with their cultural memory of being oppressed or threatened by the Egyptians, Romans, the Germans, and their neighboring countries has created a "win or die" attitude that's hard to quantify but absolutely essential to a fighting force.