Contrary to certain expectations one might have of a Jewish state, Israel is not a bagel country. Apparently all the European Jews whose forefathers bestowed upon them the secrets of the sacred art of bagel-making decided to emigrate to America rather than Palestine, and thus Israel became a land of falafel Jews, not bagel Jews – much to the chagrin of visiting and immigrating bagel Jews.
But bagels are present and improving within Israel's borders, and Jerusalem's Holy Bagel is a promising sign. Their dozen varieties of bagels, including the traditional standbys and some Israeli innovations like za'atar bagels, aren't exactly up to New York standards, but they're a lot better than what comes out of the frozen section of a grocery store, and they're inexpensive (3.5 NIS for a bagel).
Holy Bagel offers a galaxy of flavored shmears, fresh vegetables, lox and other toppings fit to make a bagel into a meal, and excitingly offers those enormous soft chocolate chip cookies which unfortunately have not yet caught on in the wider Israeli market.