There are two comments I'll refer you to, each of which will hopefully address a different angle of the question. (One of them is actually one of the first comments I ever wrote on AH! Technically, the other comment has most of that info, but I couldn't resist a bit of self promotion lol.) Bottom line is that it was encouraged ideologically (as the language of the Zionist enterprise) and practically (as a language which would bring together Jews from all parts of the world and encourage them to cast off "diaspora" languages), and started long before the State of Israel came into being.