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The King David in Jerusalem is a world-renowned classic—even if you don't stay there, sit in the lobby one evening and soak in the atmosphere. Many U.S. hotel chains are located on Hayarkon Street in Tel Aviv—most of them have nice views of the Mediterranean. New luxury hotels are opening in both cities with the business traveler in mind, with a full array of high-tech, in-room amenities. The Galilee is full of hospitable guesthouses and bed-and-breakfasts.

Mitzpeh Ramon (on the road from Eilat to Beer Sheva) is a Negev desert tourism center. The most renowned accommodation there is Succah in the Desert, an ecotourist setting of eight tents pitched in the area of the Ramon Crater. Each tent is cozily decorated and receives electricity generated by solar panels.< Show Less