Israel is a good place to buy souvenirs. As in other Middle Eastern countries, haggling in Israel is a tradition. Keep the following points in mind when you're shopping:

• It is rare that you should ever have to pay the full price listed on an item (note this applies mostly to souvenirs, not everything in the markets and is not true of ordinary retail shops like department stores). 

• Always be ready to walk out of a shop and don't be surprised if the sales person follows you out. 

• Don't think you'll get any better deal from Jews than Arabs. Sometimes the opposite is true. 

• The merchants in the market in the Old City, in particular, can be very aggressive. Don't be intimidated. Remember, you're the customer and it is their job to satisfy you.

• Keep in mind what you can afford and don't let yourself be talked into paying more. You'll probably see the same items in more than one store, so shop around before you decide.

• Be clear on the exchange rate before you buy. 

• Haggling is an art, and involves some gamesmanship, but it isn't polite to waste a merchant's time if you have no intention of buying something.

Items common in the U.S., such as film and books are likely to be more expensive in Israel than at home. By paying with a credit card, you can usually get a better exchange rate. Sometimes you can get a better price if you pay with U.S. dollars.

Also, Israel assesses a Value Added Tax (VAT) of 17% on goods and services. Prices should include this tax. For purchases over $50, you can get a refund of the tax at the airport before you leave. To do so you'll want to get to the airport early so you can go to the customs office. When you make your purchase, the merchant should put it in a clear plastic bag with a copy of the receipt inside. Keep the original. The bag must be sealed and remained unopened to get the refund.