The Balfour Declaration is a decision in which 
Israel can appear in the game. Similar decisions include Host the Congo Conference and British South Africa Company.
Historically, The declaration was a red letter from Arthur James Balfour to Walter Rothschild. The declaration made a heavy impact on the Muslim world by eventually creating the Israeli state.
In the game, the declaration can be enacted by any civilized nation with Palestine, the region, owned or sphered. Also, Revolution & Counterrevolution has to be researched to enact it. 
Egypt owns the province initially, and 
Ottoman Empire has cores on it.
If The Ottoman Empire owns Palestine, be sure to enact the decision, a few nationalists in Turkey couldn't hurt. If Egypt holds Palestine, enact the decision and free Israel from Muhammad Ali. Do not enact the decision if you're either one of these countries unless you want less infamy.
The AI will never take the decision except for 
United Kingdom, which will always take the decision if possible.
Perhaps illogically, in the game files it is placed in the txt-file for Turkish decisions.
Ingame description
His Majesty's government view with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavours to facilitate the achievement of this object... Since we exert a significant influence in Judea and the Levant, the ancient birthplaces of the Jewish Nation, we can issue a declaration expressing our favorable attitude toward the establishment of a national home for the Jewish people there.