Yes, there is no Waze (yet), but there are many good alternatives:
1. Nokia Map has added Israeli map, check it out. They also added 3D buildings in Tel-Aviv. There is no support for Nokia Drive yet, but it will come.
2. Maps (the Windows Phone 7.5 map software) also provides maps for Israel. You can install it from the store.
3. Bingle Map provides search in Hebrew and waypoint navigation
4. GMaps Pro provides traffic information as well as maps in Hebrew.
5. GPS Turn By Turn also support navigation in Hebrew.
6. Navigation (Turn By Turn) has Israel Map now. I drove with it all over Iceland and it was great.
Actually. All the above provide waypoint navigation.
Outdoor Navigation is amazing 4X4 and biking navigation software with off-road trails and localized maps.
There are many other navigation software that use Google, Bing, Ovi, Open Cycle, and other GIS/Map providers that also cover Israel.
I prefer GMap Pro because of the traffic information it provides, however I use many of the other software and most of them work well.