A Rav in Amsterdam wrote a letter to Rav Yitzchok Isaac Liebes saying he was concerned that Shuls say a Mi SheBeirach during davening for the Israeli government. Even more worrisome to him was that they use the language "Medinas Yisroel, Reishis Tzemichas Geulaseinu", the State of Israel the beginning of the sprouting of the redemption.
Rav Liebes in Shu"t Bais Ovi (5:69) addresses the issue of davening for the government and the origins of the Minhag. He says that it is a very old minhag in Germany and in all of Europe to bless the King, Queen, and the heir to the throne each Shabbos by davening, whether they are friendly or even antagonistic towards the Jews, because of Sholom Malchus. This Minhag is brought in the Abudraham and some say the even the Machzor Vitri, a Talmid of Rashi. The Mekor for this Minhag is the Mishna in Avos (3:2) where Rebbi Chanina Sgan HaKohanim says to daven for the peace of the kingdom (although Rebbi Chanina never said to daven publicly).
Even when monarchies were replaced by democracies and the tefila became less relevant, there were still communities that continued to say this tefila. Therefore in these places, if they choose to add a tefila for the state of Israel one should not start a tumult over it. As far as the language of Reishis Tzemichas Geulaseinu, he doesn't see it as a Kefira in Bi'as HaMoshiach. He says that the Imrei Emes of Ger said during the 1947 war, "Kach He Geulasam Shel Yisroel, Kim'ah Kim'ah" that is the nature of the Geula, slowly slowly.
Therefore he concludes, do not feel bad and do not make calculations and get involved in politics. He who goes innocently will rest securely.
* As seen on Revach.net