The official languages of Israel are Hebrew and Arabic, and English is a semi-official language. All road signs, warning labels, and government announcements are written in these three languages, and sometimes a few other languages, too.
Due to the large number of immigrants, French, German, Hungarian, Armenian, and Romanian are common as well. Metropolitan areas are more diverse in terms of language, and many meetings and businesses are conducted in English for convenience. The further you travel from larger cities, however, the more frequently you will hear Hebrew.
The Hebrew language
Hebrew was not always the language of Israel. At the turn of the twentieth century, Hebrew was used solely as a religious language. To serve as an official language for the Israeli state, Hebrew had to be transformed into a modern language. The Hebrew revival used old word roots to create the modern vocabulary which over five million people use today.
Hebrew is read from right to left. The Hebrew alphabet (Aleph-Bet) has phonetic and orthographic components. It is comprised of twenty-seven characters and contains no vowels, although vowel markers have been introduced.
Hebrew is a verb-based language, and most of the difficulty in learning Hebrew lies in learning verbs and the nuances of tenses. If you're planning on immigrating to Israel (aliyah), you should start learning Hebrew as soon as possible.