There are a number of ways to look at it. First of all, many countries have not imposed sanctions on Russia, Israel is by no means unusual. The West can't, nor should, coerce willy-nilly on those countries who don't put up sanctions of their own.
(Times of Isreael) Israel hasn't joined anti-Russia sanctions, but its firms need to tread carefully | The Times of Israel
Israel has managed until now to walk a tightrope between Russia and Ukraine. There are Jewish communities in both nations and Russia maintains a heavy military presence in Syria, on Israel’s northern border, where the IDF needs to be able to continue its aerial sorties against Iran-backed targets. This ostensibly neutral position has enabled Israel to assume the role of mediator between the two warring parties.
Jerusalem is not currently planning to impose sanctions on Moscow or Russian oligarchs, senior Israeli officials told The Times of Israel.
but the same article then goes on to say:
A number of Israeli tech firms have already suspended or pulled their commercial operations in Russia over the ongoing war with Ukraine, including Fiverr, a company that connects businesses with freelancers offering digital services; web creator Wix; payments firm Payoneer; and gaming giant Playtika.
So, a number of Israeli companies have cut ties with Russia and there is no indication either that Israeli firms are engaged in assisting Russia in bypassing Western sanctions. Even China treads carefully there.
So Israel, while not putting in place its own sanctions is abiding by Western sanctions.
Israeli firms that want to trade with private or government entities in Russia and Belarus must check if the entities involved in the deal — whether a trading partner, a financial associate or even a means of transport — are on the sanctions list, the Israeli Ministry of Economy and Industry said in a March 9 letter it sent to Israeli companies.
And the trade that is taking place is not that significant either (Haaretz):
Israel wasn’t one of the countries that imposed sanctions on Russia, either diplomatic or economic. But it does have a significant number of citizens whose livelihoods depend on their connection to Russia.
This week, the Bank of Israel issued a report predicting that the war in Ukraine and the international sanctions won’t significantly affect Israeli exports.
“First, Israel’s direct trade with Russia and Ukraine amounts to only about 1 percent of Israel’s total trade,” it said.
Last, and certainly controversial to some, just because the US is a close ally of Israel doesn't necessarily mean that Israel always reciprocates the favor. Or at least not when it's not in its national self-interest to do so.
Since we are on a bit of a Mearsheimer binge here lately, that is one of the points made in The Israel Lobby and U.S. Foreign Policy - Wikipedia. No, not so much the book's claims about lobbying as the observation that the US doesn't necessarily always benefit all that much from the relationship. For one thing, while Israel is a strong regional ally, its involvement until recently, tended to be more of a problem than a help, unless it the issue specifically concerned Israel in the first place. Not necessarily because it didn't want to, but because its involvement would have been a cause for Arab rejection.
During Gulf War 1 for example, Israel, far from being able to assist against Iraq, was more of a drain on coalition resources. The reason being that the Arab parts of the coalition would have pulled out if Israel had intervened alongside that the US. Knowing that, Saddam SCUDed Israel, hoping to trigger some Israeli response. The coalition had to divert quite a lot effort towards SCUD hunting in a vast desert area that was outside their own zone of operations.
To take another example, how many US bases are there in Israel? One, a very minor one, and it only opened in 2017.
In 2022, after Israeli-Arab diplomatic normalizations with a number of states, it is quite possible that Israel would be more able to support US foreign policy goals in the region, should it choose to.
The US has excellent relations with Israel and there is a very valid and strong case for guaranteeing Israeli security in the last resort. But this relationship does not necessarily mean that Israel will subordinate its national interests to those of the US.
p.s. what would really be helpful, rather than imposing sanctions, would be if Israel sold some of its weapons to Ukraine. But, again, one can see why the upside to Israel is limited and the downside greater.
p.p.s. "weaken and isolate Russia" should not be a goal the West pursues. Merely allowing Ukraine to restore control over its territory.
p.p.p.s. some areas where the US certainly benefits from the alliance are CIA-Mossad collaboration, defense technology exchange (Israeli weapons tech is topnotch) and science/engineering. Israel is by no means a negligible partner.