I'd recommend you contact Regent Tours toll-free at (866) 383-6130, and ask for either Orit (who may still be out of town) or her assistant. Tell them I sent you. I have used her for four trips (including the one I am on right now), and she has consistently gotten me rates 15-30% better than I would have received on my own. She had me at the Metropolitan Hotel in Tel Aviv, basic but very reasonable, about 2 blocks from the beach. Nothing fancy, but it worked fine for me. But she has some others she works with.
In Jerusalem, she works a lot with the Prima Kings, and you might also want to look at the Eldan Hotel on King David Street. I prefer the Three Arches Hotel at the YMCA, but that might not fit your bill.
Finally, if you'd like, I can send you a 25-page guide on Israel travel that I have written based on my eight trips here. I will be updating it based on the trip I am on right now, but you can also print out the trip reports (see Labatt's trip reports under this forum), and you'll have a semi-update now. If interested, e-mail me at Labatt@fuse.net. It's free and noncommercial; I'm a lawyer who just likes to help people plan their trips to Israel.
Good luck, and you're going to love it here!
Currently in Tiberias