Translation:The tourists complained because they are Israelis.
Do they mean: "The Israeli tourists complained because that's such an Israeli thing to do" (which I find hilarious because it's a bit true) or is it more "The tourists complained about those other people because those other people were Israelis"? (Which would be rude and discriminatory)
Both interpretations fit the text, both the Hebrew text and the English text. I think the former makes more sense as long as we have no context. With context, it may be easier to decide. Consider the following two sentences:
The hotel offered only a continental breakfast. The tourists complained because they were Israeli.
When the tourists arrived some people were already in the restaurant, talking loudly in Hebrew. The tourists complained because they were Israeli.
Depends. In English, "the tourists complained because they were Israelis." would be something you say as you tell the story after coming back from the trip, but if you and the Israelis are still actually on the trip during which they complained, if they are still tourists, then it makes more sense to say "The tourists complained because they are Israelis."
The tourists complained then because they were Israelis then, and I'm not making any comment about what they are or aren't now. You're right. That is how we would formulate this in English.
In Hebrew both are natural. Since the past tense is a whole word longer, you'd want some justification to use it. So either you really don't know (or don't want to comment on) whether they're still Israelis, or you definitely know that they're not any more.
If you said: התיירים התלוננו כי הם היו ישראלים it might make me pause and think "Why? What happened to them afterwards?" but it's not that out of the ordinary.