In Tel Aviv, Freddy's Cigars (formrer manager of the Jerusalem Casa) is small but cozy with a decent but expensive selection of smokes and drinks.
In Jerusalem, The Smoke Shop on the new Mamila Street pedestrian mall These guys have had a few shops over the years and are the new owners of the Casa as well) is a nice, bright airy spot with great espresso. I've bought lots of cigars from them over the years and while I had questions about some Sublimes and La Murallas they sold me they seem by and large more legit than most non-Casas. Stay away from the older pushy salesman. Incidentally, the Mamila Alrov hotel up the block has a cigar bar and a rooftop lounge but call to find the latest smoking policy for the roof, seems to change.
A fe minutes away on Queen Shlomzion St. is the Casa. Very nice even if not the best stocked Casa on earth. Also on QS is Meir Cohen which has some nice aged smokes. Many of which I've enjoyed, some of which I passed on as I couldn't be sure of their origin and some of which smoked poorly though I wasn't sure if they were fakes or maybe spent some time in a humidor that wasn't properly maintained. A shop to visit but shop carefully!