Official currency of Israel is the New Israeli Shekel (NIS), divided into 100 agorod. The sign used to display shekel values is ₪. Banknotes of 20, 50, 100 and 200 shekels are circulating; you get coins of 10, 5, 2, 1 and 1/2 shekel value. You could exchange money in your home country, but it is most often recommended to bring EUR or USD – you can easily exchange these currencies against NIS at post offices (even as there might be some waiting lines).
I could pay with my credit card at every hotel and shop. Only some gas stations limited payment with PIN code to seven shekels (which is pretty nothing). Most ATMs didn’t accept my VISA card or MasterCard, but there were some (especially at shopping mails) that handed out 500 our 1.000 shekels to me.