I need to re-state my question.

Is Instanbul considered Middle-East or Europe ?

I know they're considered the same zone as far as Oneworld Explorer RTW fare (North America and Australia rules) is concerned, but the four sector limit in Europe SPECIFICALLY say that you may not travel to/from the Middle East more than two sectors. Since Europe is best covered by BA:

LHR-TLV-LHR-FRA-LHR: Four sectors, two sectors to/from the Middle East (LHR-TLV-LHR), thus allowed.

LHR-TLV-LHR-Dubai-LHR: Four sectors, but all to/from the Middle East, thus not allowed.

So my question is, if IST is Europe, then LHR-TLV-LHR-IST-LHR is perfectly legal, but if IST is considered as part of the Middle East, then I'll have four "Middle East" sectors, thus not allowed.