Here is what is written on Wiki concerning Chabads involvement with the zionist movement...
http://en.wikipedia.org/wiki/Haredim_and_ZionismChabad-LubavitchMain article: Chabad
The fifth Lubavitcher Rebbe, Rabbi Sholom Dovber Schneersohn (1860–1920), also known as the RaShaB, published Kuntres Uma'ayan, the beginning of which contains a strong polemic against Zionism. While strongly opposing the notion promoted by the Mizrachi - Religious Zionist movement that the state of Israel in itself without Moshiach (Jewish Messiah). He was deeply concerned that secular nationalism would replace Judaism as the foundation of Jewish identity.
The seventh Lubavitcher Rebbe, Rabbi Menachem Mendel Schneerson as wells as his predecessor, Rabbi Yosef Yitzchak Schneerson nonetheless insisted on trying to increase the observance of the Torah in Israel both among individuals as well as to make the state's policies more in line with Jewish law and tradition,[23][24] he also expressed overwhelming support for the State's military endeavors, and vehemently condemned any transfers of land as against Jewish law. His reasoning, was based on the code of Jewish law, the Shulchan Aruch [25] which states that the Sabbath must be violated (carrying weapons) by the residents of a Jewish community (in any country) that borders a hostile gentile settlement, even if they are threatened in the most subtle manner. He viewed the whole of Israel as such a community and that was the impetus for his support. He argued that the safety of the Jewish people was paramount, and the physical presence of so many Jews in the land meant that its borders had to be protected as a matter of course. Nonetheless, he also drew support for his statements from the notion in the Torah that the land of Israel was given to the Jewish people, and that inherent Jewish ownership of the land could not be superseded by mere political interests. Nonetheless, he refused to call the state by name, claiming that the holy land exists independent of any authority that sees itself as sovereign over the land. He further criticized feelings of nationalism connected to the State of Israel, saying that the only thing that unites Jews is the Torah, not a secular state that happens to be planted on holy land.[26]
Many Chabadniks in the world live in Israel, and there are a great deal of Chabad houses there. The serve in the Israeli military. In line with the Rebbe's instructions to vote for the a party that refuses to support giving away parts of the Land of Yisrael as part of any peace negotiations Chabad does not endorse any particular party in the election process.