Yes, this match could be extremely tight. Little to separate Ram and Melzer, and Erlich and Peya. The home advantage might nudge it slightly in Israel's favour, especially as Melzer and Peya are known to get tight in matches. Otherwise, it is too tough to call and is about as close to a 50/50 shot as you can get.
As you say, the result is also crucial for the outcome of the overall tie. If Austria win tomorrow, it will be extremely difficult for Israel to fight back as neither Sela nor Levy are favoured to win their reverse singles...odds of them winning both aren't great (although not impossible by any means).
Well, it was a tight but comfortable match as expected, with Israel winning, again as expected. It was a good match from the Israeli pair. With the doubles in the back pocket, now Israel will like their chances. I think Sela has a decent chance at beating Melzer. He brings his A game for Davis Cup ties, especially at home. That will be a very interesting match. I can't call that one, personally. However, if Melzer wins, Austria would be the slight favorite with Fischer/Haider-Maurer over Levy.
The atmosphere of playing at home is so much of a driving force for Israel that although Sela/Levy are the underdogs on paper, their will to win will push them to great heights. I still can see this going either way, this was a needed victory for Israel to have an opportunity tomorrow.