The article reports that the iPhone carrier will be Pelephone and that they've been told to "get ready" for the launch. This is strange considering that Orange is the dominate carrier in the area. Orange also has pre existing deals with Apple so that match seemed more likely.
Supporting this information is Apple's recent announcement that the iPhone OS 3.0 will feature support for Hebrew and Arabic.
Even though the iPhone is not officially available in the country, the device is very common. iPhones are sold jailbroken and unlocked with Hebrew pre-loaded.
No word yet on pricing or distribution information.