You make a valid point. In reviewing what I wrote I made a very broad statement that appears to reinforce anti-Israeli conspiracy theories. I actually regard the incident as a brilliant geopolitical manuever by the leaders of the young state of Israel. It's been many years since I studied the history of the cartel and my recollection of details isn't great. Without books on hand I'll do my best to recall what took place.
In the early days of modern Israel, many people had expertise in working with diamonds, and they'd built a cottage jewelry industry. Israel wanted to leverage their skills into industrial polishing. DeBeers wanted to maintain control over those functions and obstructed Israel's entry into the industry. So Israel built up a large cachet of diamonds and threatened to dump them on the market. In order to prevent devaluation, DeBeers conceded and assisted Israel in building their industry.
Absent specific details I probably should have omitted the story altogether. At the very least I should have noted DeBeers' role in WW2. What's certain is that during WW2 the US wanted to transfer diamonds to North America to supply their industry. DeBeers refused. Meanwhile, diamonds continued to flow into Nazi Germany, supplying their war industry. Some historians suggest that DeBeers actively cooperated with the Nazi's. Others claim that the Nazi's smuggled them out through third parties.