The American Colony Hotel is a converted 19th-century pasha's palace within East Jerusalem, close to the walls of the Old City and the Damascus Gate. The Relais & Châteaux hotel was opened more than a century ago by an American family—hence the name—and has been lavishly appointed in East-meets-West style. Some suites have settees and canopy beds. Meals are served in an interior courtyard under the shade of palm trees, and the outdoor pool is enclosed by the regal stone walls of the former palace. It all adds up to a quiet escape from the city's hubbub, where you're likely to see everyone from visiting journalists and UN workers to wealthy Palestinian families out for a weekend lunch.

Owned by the same Israeli chain that runs Jerusalem's historic King David, the Dan is as close as Tel Aviv gets to a true grande dame: a landmark built in 1953 that still lures the city's most important (and deepest-pocketed) guests. But it's a grande dame in the most Israeli of ways: The landmark modernist structure has a kinetic multicolor facade painted by famous artist Yaacov Agam. A 2008 $7-million makeover turned the hotel into one of Tel Aviv's most modern, with Wi-Fi, iPod docks, and LCD TVs in roughly half of the hotel's 286 rooms. Capping it all is an oversized "forest" photo rendered in dramatically illuminated greens. The best rooms to book are the Sea View Executives, which are the only hotel rooms in town literally right on the Med (the others are all set back behind the waterfront promenade). Also on the sea are the Dan's main lobby lounge and new haute-kosher eatery D (with split dairy and meat menus).

This Moshe Safdie–designed property in a revitalized former industrial area is a short walk from the Old City and adjacent to Alrov Mamilla Avenue, a commercial and cultural thoroughfare—"you can't beat the location." Throughout the "austere but beautiful site," guests find golden Jerusalem limestone, pillars, and arches. Rooms have Frette linens, L'Occitane toiletries, and Fendi furniture. Global cuisine at the "expensive daily buffet" ranges from Moroccan salad to prime rib.

(384 rooms)

The splashiest luxury hotel in Tel Aviv, which opened in 1998, lies a bit outside the city center and is a favorite of corporate travelers because of its massive conference facilities and elaborate business center. Still, it managed to lure Madonna when she came to visit Israel in the fall of 2004. Perhaps what caught her eye was the hotel's large outdoor pool deck (which morphs into a hip lounge on balmy summer nights) or the location (just across from the beach). Its 555 units include just about every imaginable room configuration, from standard rooms to apartmentlike royal and presidential suites.

The 12-room Hotel Montefiore is Tel Aviv's first world-class boutique hotel, with perhaps the most cosmopolitan and stylish clientele in town—if not in all of Israel. Set in the heart of the UNESCO-designated White City's collection of Bauhaus buildings, the Montefiore inhabits a restored 1920s mansion and pays homage to both the quarter's architecture and its Mideast-meets-West aesthetic. Owners Mati and Ruti Broudo have been longtime neighborhood fixtures, running both the Coffee Bar and Brasserie restaurants. Hidden behind an Ottoman-era Mediterranean-style facade, the hotel's rooms come with private balconies and period furnishings including 1930s chairs, tables, and sofas by German Bauhaus designer Thonet—a form-follows-function counterpoint to the hotel's more elaborate exterior. Bath and body products come from local olive-oil firm Olia, and each room includes a library stocked with books on design, art, and travel. Downstairs, the Montefiore's restaurant is a clubby, dark, wood-lined spot that serves…surprise…haute southeast Asian cuisine. Standout dishes include Tom Yum seafood salad and sea bream in lemongrass cream. After hours, there's a menu of small bites (prosciutto with figs and melon, goat cheese with basil and tomatoes) along with a small yet successful wine list of mostly Israeli, French, and Italian bottles.

During the era of British rule, the venerable King David Hotel served as a home away from home for much of the English elite. More than 50 years later, the hotel continues to reign as Jerusalem's—if not Israel's—most lavish abode. While the sedate furnishings in neutral shades and floral prints in the 237 rooms could use a bit of a touch-up, the hotel's setting and amenities are beyond reproach: It's just a ten-minute walk from the Old City, and the outdoor pool is huge and set within elegant, manicured gardens. The building itself, with its pale stone facade, could easily hold its own against any of the European grandes dames after which it is modeled.

On the shores of the Dead Sea, Le Méridien is the most luxurious of the many hotels taking advantage of the medicinal, salt-filled waters. A holiday resort set on 12 landscaped acres, it has three swimming pools (including one for kids), a private beach, a children's program, and organized excursions to nearby desert sites such as Masada and Jericho. The 600 rooms are modern and handsomely appointed, some with private balconies high in the sky. The neo-classical Mineralia Spa is another reason to check in: It has 21 treatment rooms for massages, Dead Sea salt scrubs, and mud wraps.

Located 1,500 feet up Mount Canaan, in the Galilee region, is Israel's oldest hilltop retreat and a Relais & Châteaux property. Mizpe Hayamim was founded in 1967 by Erich Yaakov Yaruslavsky, a German refugee homeopath, and still reflects his approach to wellness. The 100-room hotel is a collection of rustic stone structures anchored by a central spa and a series of indoor and outdoor pools and Jacuzzis; the latter have spectacular views over the entire Hula Valley, straight to the Sea of Galilee. Spa treatments are based on natural river stones and ayurvedic oils. Produce, dairy products, and bread are procured from the hotel's organic farm (which can be toured by guests) and prepared into menus that change daily. Hiking trails meander over Mizpe Hayamim's 37-acre spread, and the artist colony of Rosh Pina is nearby. The 14 deluxe suites have wrought-iron canopy beds, handwoven Persian carpets, couple-sized Jacuzzis, and panoramic views of the Golan Heights.

Historic Neve Tzedek is Tel Aviv's original hot 'hood, established in 1887 as the city's first Jewish district. Since that time—and in particular over the past two decades—the quarter has been popular with artists and writers and has attracted increasingly high-end restaurants, including the pan-Mediterranean bistro, Nana. Last year, Nana owner Golan Dor decided to branch out with the debut of his Neve Tzedek Hotel, a five-suite urban hideaway tucked into an elegantly restored Ottoman-era mansion. The suites are oversize—ranging from 500 to 1,200 square feet—with period details such as high ceilings, arched windows, and elegant plant-filled balconies. Two on the ground level include their own gardens; the penthouse has an alfresco hot tub; and all have a home-away-from-home feel with in-room wine cellars, fruit and chocolate displays, computers, and impressive levels of privacy. There is no formal restaurant, but the hotel is within walking distance of some of Tel Aviv's top tables and guests receive discounts at Nana itself.

In Tel Aviv's historic Neve Tzedek quarter, Nina Cafe Suites is a five-suite boutique hotel whose style and spirit is inspired by the owner's many trips to Paris. It's popular with Europeans seeking an alternative to Tel Aviv's big chains. Each suite has custom-designed furniture that evokes the South of France and slate-walled bathrooms, and is individually decorated with antique lamps and European-styled mirrors and accent furniture acquired in Israeli markets. The duplex garden suite, the largest and the only room with private outdoor space, is the one to get, but it books up weeks in advance. Room service and breakfast are delivered to your room from Nina Cafe, just across the street. Although there's no formal concierge, a full-time manager arranges local excursions, in-room spa treatments, and restaurant reservations.

Among the numerous five-star hotels lining Tel Aviv's Mediterranean promenade, none can quite compete with the Sheraton Tel Aviv. Located just above prime sunning spots like Gordon Beach and near Dizengoff Street's shopping, the 331-room Sheraton also scores points for its Mediterranean-inspired Olive Leaf restaurant, outdoor pool, and high-tech, exec-friendly tower rooms with tropical-inspired decor. While its pool and fitness center are not the largest in town, the Sheraton offers every amenity necessary—along with regular special packages for family and holiday travel.