Evil aliens have decided to kill everyone on Earth! Fortunately, they've given you two minutes to save as many as you can. All you have to do is name a country to save everyone in it.
It's not the American pronounciation. It is the Arabic/Hebrew pronounciation -- "Yis-Ra-El" and also what you hear in American synagogues when saying the Hebrew prayers. But since this test is using the English pronounciation, we only need two syllables to say "Iz-Real".
It is 2, each word has 1 syllable: cape /keɪp/ and verde /vɜːd/. See e.g. Cambridge Dictionary. But maybe you're thinking of the pronunciation of "Cabo Verde" which has 4 syllables [ˌkɑːbəʊ ˈvɜːdeɪ]?
Edit: yeah I looked it up and it is two syllables just “verd”. My guess is Lady assumed the same thing. You learn something new every day.