Every time I'm tempted to spiritualize or allegorize a prophecy pertaining to Israel, my mind brings up Romans 11:29 (LSB), "for the gifts and the calling of God are irrevocable."
The problem with this is that Paul tells us you are not a Jew by being circumcised (Romans 2), and not all Israel is Israel (Romans 9).Excellent point.
Paul ties this all together in Romans 11, showing us that the chosen people of God are made up of both ethnic Jew and Gentile, which makes up the Israel of God. This means your verse actually goes against dispensationalism rather than supporting it.
"I want you to understand this mystery, dear brothers and sisters, so that you will not feel proud about yourselves. Some of the people of Israel have hard hearts, but this will last only until the full number of Gentiles comes to Christ. And so all Israel will be saved. As the Scriptures say, “The one who rescues will come from Jerusalem, and he will turn Israel away from ungodliness. And this is my covenant with them, that I will take away their sins.” Many of the people of Israel are now enemies of the Good News, and this benefits you Gentiles. Yet they are still the people he loves because he chose their ancestors Abraham, Isaac, and Jacob. For God’s gifts and his call can never be withdrawn. Once, you Gentiles were rebels against God, but when the people of Israel rebelled against him, God was merciful to you instead. Now they are the rebels, and God’s mercy has come to you so that they, too, will share in God’s mercy. For God has imprisoned everyone in disobedience so he could have mercy on everyone. Oh, how great are God’s riches and wisdom and knowledge! How impossible it is for us to understand his decisions and his ways!"
(Romans 11:25-33)