Unlike the USA , Israel has a mandatory draft, unless you are an Arab and then you are exempt.
Some but not all yeshiva students can get a draft deferment (if they commit themselves to learn full time and not work) but aren't really exempt.
The Hebrew Bsheva newspaper, page 24
http://en.calameo.com/read/001660802647424cd750ereports that very religious soldiers are being forced to serve together in mixed army units of men and women and are being denied transfer to other sections of the army that would fit their religious needs better. The article said at least one soldier was forced to shave his beard against his religious beliefs.
It is true that Rabbi Meir Kahane did serve in the Israeli army, but Israel was much different in his time than now and it is not clear to me what he would advise Jews to do under the current situation. Would he said go to the army but be prepared to continually disobey orders that are against Jewish values and face the punishment or would he advise not to go at all?
One should be aware also that the text of the oath or pledge of allegiance that the army demands of its soldiers is against Judaism, because it says the laws of the state and the army supercede obedience to Jewish morality and halacha. They use different wording to say this idea but this is what the oath or pledge of allegiance means.
When Rabbi Kahane had to make a similar type of pledge to get into Israeli Knesset {Parliament} (in an attempt to takeover the country through politics) he tried to give a commitment
without taking an actual oath that had a double meaning.
He had in mind when he made the statements towards the meaning which did violate Jewish Morality & Halacha.
I myself, personally advise Jews who are able to find some loophole to get out of the army service to get out..