Inaugurated in 2011, Jerusalem Light Rail consists of a single line that runs from Mt Herzl in the west of the city to Heyl HaAvir in Pisgat Ze’ev, in the city’s far northeast. There are 23 stops along a 13.9km route including the Central Bus Station, Mahane Yehuda Market and Damascus Gate. It runs every 10 minutes or so from 5.30am to midnight daily except on Shabbat; on Saturday services start one hour after Shabbat concludes. Tickets (6.90NIS) can be purchased from the machines on tram stops but must be validated on board the tram.
For easy travel around the city, purchase an 'anonymous' (anonimi) Rav-Kav Smart Card (5NIS) from the Egged public ticketing office at the Central Bus Station or from any bus driver and then load it with a certain number of rides (6.90NIS each, minimum two rides) or with a multiple-entry ticket. The latter costs 55.20NIS and allows 10 trips (a 20% discount on the usual cost).
Once purchased, your card can later be recharged at ticket machines on tram stops, on any bus or at the Egged desk near platform 22 at the Central Bus Station. It is valid on the light rail and all buses within the Greater Jerusalem area (but not East Jerusalem or on Egged tourist bus 99) and allows free transfers for a single, one-way journey within a 90-minute window. One child under five years of age can travel free with every paying customer (but note that strollers requite a separate ticket between 7am and 9am).
For information, go to http://jet.gov.il.