Since most Israeli cities are small, you can walk most places you need to go. You’ll see a lot and have more opportunities to interact with the people. If you’re on your own, get a map from the hotel or tourist office.
You can rent a car, but driving in Israel is not for the faint of heart. The roads are probably the most dangerous places in Israel and the traffic, especially in and around Jerusalem and Tel Aviv, is terrible.
Taxis are a common mode of transportation, but, as in most places, drivers are not always honest. They will frequently try to take you for a ride without using their meter. NEVER let them do this. Always ask before you get in the cab how much the fare should be and insist they use a meter. The one exception is for long trips, such as between Tel Aviv and Jerusalem (and from the airport) where the fares are usually set before you leave. For those longer trips, it is usually cheaper, though less comfortable and convenient, to take a group taxi or sherut. You can also learn a lot about Israel by talking to cab drivers; they’re usually not shy about offering their opinions. You do not have to tip cab drivers.
The most popular mode of travel is the bus. Busses are inexpensive and the newer ones are very comfortable. Don’t be afraid to ask the driver or other passengers for help in identifying your stop. Because of the long distance, some people choose to fly to Eilat (under $200) but traveling by bus is usually part of the itinerary on student trips .
You can make overland crossings into Egypt at Rafiah, about 30 miles southwest of Ashkelon, and Taba, the last town Israel returned to Egypt as part of the peace treaty, which is just south of Eilat. Buses run between Cairo and Tel Aviv and Jerusalem. It is also possible to take a series of taxis. The trip is a long one through the desert, broken up by a short boat ride across the Suez Canal, that you are unlikely to forget.
It is also possible to visit Jordan by crossing the Allenby Bridge near Jericho ( about 25 miles from Jerusalem ), going via the Arava Terminal in Aqaba near Eilat or taking the northern route through the Jordan River Terminal just north of Bet She’an.