For a tiny country as it is, it packs a lot of punch in terms of things to do. Though all of it is focused in largely two cities and a few towns around them. Transportation though is expensive and complex in its own way. Food is not too cheap, either but its usually of excellent quality. Hotels are a bit of a mixed bag but some of the apartments available are excellent. Like in most places, location is everything.
Israel is a country for the walkers, most areas are best explored on foot and often the narrow streets in Jerusalem old city and crowded beach will anyway discourage any other mode of transport. Longer distance travel is a whole different deal. A rail system is being built and is far behind schedule, the Jerusalem surface train serves only a limited purpose as its a single line and there is pretty much nothing else. The most reliable way to travel across cities are the shared taxies, which are in essence mini vans where you pay by the seat. While some drivers will follow the schedule, some will not budge an inch till every seat is taken or the passengers agree to absorb the cost of any empty seats. There are also private taxis, but they can be slightly expensive, though most hotels and find you negotiated rates. For some places off the beaten path, these are more practical.
On thing to remember for transportation is the traffic around Tel Aviv. While most of Israel roads offer a smooth transit, the beach town of Tel Aviv is an exception. While on days of certain celebrations, the streets are closed at all and any travel can be a headache. However, on Sabbath, while a taxi maybe harder to find, the roads are all nearly empty and even the trains stop. Some shared taxis are available on Sabbath but its best to book in advance.
Picking a place to stay can be tricky here as being close to action is quite important. In Jerusalem, its best to stick close to the Jaffa street and not too far away from the old town. Besides the Old Town, the tradition market of Ben Yehuda is the other walkable place. I was in these amazing apartment called “Check In Jerusalem”. The experience and the location were exceptional. If you plan to stay around the dead sea area, the Crowne Plaza is probably the best bet as it is one of the only hotels with a private beach on the Dead Sea. The food is not the best, but the location makes up for it all. In Tel Aviv, with all the traffic and all, I think the beach is really the best place to be close to.
When I travel, food is one of the key objectives of the trip. Good food was very easy to come by and the local fare is delicious and healthy, a rare combination. Hummus and pita is a universal appetiser and also the main course in certain places. There is virtually no rice in the diet and the meat is mostly grilled. All this makes for excellent flavors and mostly a set of dry dishes with hummus to add some moisture. The local drink is a fennel flavor Arak which goes really well with a lemonade and some mint leaves. The Ben Yehuda market has some lip smacking eateries and so does the Old Town in Jerusalem. While Israel serves all the major international cuisines, the local food is so awesome that its not easy to convince yourself to eat any international food. The most amazing thing is that the street food is just as fantastic as the restaurants and often they serve similar menus.
The local markets are also full of exotic delicacies like fancy teas and ever popular multi colored candy that is mostly made of gelatin, sugar and some fruit color. It looks and is probably super unhealthy but then it is choice people make, by the pound.