Until recently, tipping wasn’t an issue in Israel, but these days waiters expect a tip of 10% to 15% or more – in cash, not by credit card – depending on the level of service and how fancy the place is (the pricier the joint, the higher the percentage). Except for groups, restaurant bills almost never include service – if in doubt, ask. Israeli waiters generally pool their tips and share them with kitchen staff. In the Palestinian Territories, tipping in restaurants is not the norm, except in touristy places, so waiters will be grateful for any gratuity.
In hotels, it's a nice touch to leave 10NIS to 20NIS a night for housekeeping staff.
Taxi drivers in both Israel and the Palestinian Territories do not expect tips.