Israel is a small country, but since the public transportation system is very adequate developed and cheap. However, the  most convenient way to get around is by car. The roads are modern, parking is available almost anywhere (might be a bit more difficult to find in the big cities like Tel Aviv or Jerusalem, but still better than other big cities in Europe or in the USA, for example) and distances are usually short. Most tourists enter Israel through its national airport, Ben-Gurion, located in the central region of the country, so the most convenient way to hire a car is car rental in Israel Airport.

Car rental in Israel airport tips

- In Israel, you have to be 24 years or older in order to hire a car. For mostg western nationalities, a driving license from your country is enough, and you won’t need an international driving license, but make sure to check before leaving for Israel that this is the case for your country.
- All car rental companies charge an airport tax of $27 for car rental in Israel airport, as in all international airports. So if you can find a cheaper way to get to your first destination, and you don’t mind the hassle, you might be able to save a few bucks by picking the car up in a different location. You’ll be charged the fee even if you just return the car at the airport, so if you want to save the money, you’ll also have to find another way to get to the airport when leaving Israel. Keep in mind that most agencies are open from 8:30-5:00, closed on Saturday and holidays, except for at the airport. 
- You don’t have to book the car in advance, as there are many car rental companies at the airport, but in order to get the best deal, it would be wise to check all options and book the car at least a month before arrival. This way you can make sure you’ll get exactly the car you want for the best price available. This dependent on the season and if you arrive during a national holiday in Israel.  Landing after a long flight, you would probably be exhausted and weary. Still, when you receive the car, don’t forget to check with the rental agency  for any damages or scratches, that may cause you inconvenience when returning it.

- You won't get charged VAT (17%) if no Israeli citizen will be driving. So, for example, if you are hiring an Israeli tour guide, and if the guide is going to drive (this is illegal and should not be considered as there is no insurance coverage in case of accident), you will pay the 17% VAT, but if you do all the driving yourself, you will not pay the 17% VAT. Exception: If you rent a van large enough that it counts as a commercial vehicle (e.g. Hyundai i800, which btw is an excellent vehicle for schlepping tourists plus suitcases all over Israel), you pay the 17% VAT regardless of whether or not an Israeli citizen drives it.

- The GPS that Hertz will rent you is the "ITURAN". $10USD per day, and it's awful. If you stop at a light, you can watch it count down how far it thinks you are from the intersection: 60m, 40m, 20m, ... all while you're standing still at 0m from the intersection. It can take up 10 seconds to home in on where you are. Not good when you're navigating around the winding roads in Jerusalem or Tel Aviv and wondering exactly which of 3 very close offshoot roads to take from a traffic circle. And it makes bizarre route selections. Also, even the Hertz folks will tell you that when you are coming to an intersection, you should look at the route on the display before you get near the intersection, because the GPS often jumps the gun thinking you've already made the turn, and starts showing you a different (rotated) picture and calling out different directions ("Go straight") prematurely (!) Perhaps it's trying to make up for the fact that it knows it's slow on actually homing in on where you are exactly?) Israelis are all using the Waze app on their smartphones now, instead of a dedicated GPS unit.