The Israel Commissioner of Patents has ruled ( Circular MN 85) that it is not possible to incorporate material into an Israel patent application by reference. The term “incorporated by reference” shall henceforth be deleted if it appears in a patent specification.
Additionally, Examiners may request that material previously incorporated by reference be added explicitly to the background of the application, and doing so will not be considered as adding new material.
This ruling brings a certain standardization to the practice of different examiners and provides support for a burdensome requirement.
It is not clear from the Circular, if, when requesting allowance in Israel, on the basis of a corresponding issued US Patent under Section 17c, the specification will require amending. Based on recent Office Actions requiring various other amendments, I assume so.