You can rely on your credit card almost anywhere in Israel. Almost every store or restaurant will accept Visa and MasterCard. Discovercard is not accepted. American Express is, but not as readily as the first two. In addition, you are able to use your debit card from certain ATMs that are found in most hotels and even on the streets. With your debit card, and the right machine, you can get your $100 (or other amounts) in its sheqel equivalent. And with your sheqels you can buy your cup of coffee, a danish, a coke, etc. — When the purchase is small enough that it doesn’t warrant the use of your credit card.
However, when you are making larger purchases, you are going to want to use your credit card. It is important to notify the credit card company before you depart that you will be abroad and that they will be seeing purchases from Israel (or any other country you might be visiting). You will also want to give them the dates of travel so they know that purchases will occur during a specific time period.
Help your credit card company to secure your card with this information.