Is it permissible to marry an Israeli woman, knowing that my friend is married to one?

Marriage to chaste, virtuous women from the People of the Book is an exception to the prohibition of marrying polytheist women.

Marrying a Jewish woman residing in occupied Palestine (a woman of a belligerent state) has a special ruling. The majority of jurists permit it, though with some disapproval. However, Ibn Abbas, Ibn Umar, Al-Nakha'i, Mujahid, Al-Thawri, Al-Hakam, and some Hanafite jurists in one narration, consider it forbidden.

Malik disapproved of marrying women from belligerent states due to the concern of leaving children in a land of war, and due to their handling of alcohol and pork.