Jerusalem is older than the Bible and Tel Aviv is a thoroughly modern metropolis. But in recent years, both cities have started to buck those long-held stereotypes. Jerusalem, a holy place steeped in Jewish, Christian and Muslim history, is modernizing with new hotel projects, trendy boutiques and restaurants. Tel Aviv, often considered the New York City of Israel, is seeing the value in restoring its historic sites, like the ancient port city of Jaffa and the storied Hatachana train station.

Modern Jerusalem                                          
In Old Jerusalem, the faithful still flock to the Western Wall of the Temple Mount, Judaism’s holiest site, to slip hand-written prayers into the cracks of the wall. Christian pilgrims still retrace Jesus’ final steps to crucifixion along Via Dolorosa, and Muslims still worship at the golden Dome of the Rock, Islam’s third-holiest site, where Mohammed was said to receive the Koran.

But in the past few years, two neighbourhoods to the north and south of Old Jerusalem have undergone a spate of new development to keep up with tourist demand, revealing pockets of a modernised city amid otherwise historical sites.

The northern part of the city on Mount Scopus has developed a collegiate-vibe, thanks to two universities — Hebrew University and the Bezalel Academy of Arts and Design. Young hipsters party at HaTaklit (The Record), a bar started by three men who share an obsession for collecting records. Rare vinyl covers the walls and a DJ spins every night with an emphasis on indie-rock. Literary majors flock to Tmol Shilshom (Those Were the Days), a bookstore and café housed in a 130-year old building, where Israel’s best known writers read from their works and aspiring scribes work on their next great novel.

Emek Refaim, the main drag of the German Colony neighbourhood in southern Jerusalem, is lined with new restaurants and high-end boutiques. The street buzzes on Friday mornings, the start of the Israeli weekend, with people brunching, shopping and scoping out the arts-and-crafts fair in the courtyard of the alternative Adam Waldorf School. The school opened in 1993 and adheres to an unconventional teaching style; in the early years, the alphabet, reading, math and other lessons are taught using movement, stories, art, music and crafts.  

After you work up an appetite while shopping, grab a bite at La Boca, Jerusalem’s only kosher South American restaurant, opened in 2010 by owner and chef Guy Kimhi who spent a year backpacking through South America. Stav Jewelry, the studio of husband and wife designers Dalia and Eyal Stav, sells handcrafted jewellery made of gold, silver, ceramic and precious and semi-precious stones, as well as locally-made leather handbags. Cap off your day with a film at the Lev Smadar Theater, a quaint art-house theatre just off Emek Refaim that attracts a young, secular crowd. On Shabbat (the Jewish day of rest), the theatre is often crowded with local artists, while the rest of the religious city gathers for family meals.

Closer to the tourist centre, a 223-room Waldorf Astoria Jerusalem is set to open in 2013 near the Jaffa Gate. A 10-minute walk away is the two-year old Mamilla Hotel, which brands itself as Israel’s first luxury lifestyle hotel.

Old Tel Aviv
Unlike Jerusalem, where ancient sites are the main draw, Tel Aviv has long been considered a modern city in a deeply historical country. Its contemporary arts scene is anchored by the cutting-edge collections at the Sommer Contemporary Art Gallery, the Herzliya Museum of Contemporary Art  and the sleek and sexy Design Museum Holon, opened in 2010 and designed by star-architect Ron Arad. The city’s exquisite Bauhaus architecture even won it a spot on the Unesco World Heritage Site list.

But along with being Israel’s most modern city, Tel Aviv is now working to preserve its past through the ancient port city of Jaffa. In 1909, neighbouring Tel Aviv was founded by Jews who left the cramped conditions of predominately Arab Jaffa. Since 2009, the 4,000-year-old harbour town on the Mediterranean has been undergoing a restoration, with the goal of turning it into an artists’ quarter, packed with high-end restaurants, bars and cafés. Jaffa’s winding streets get overrun with tourists in the warm summer months, drawn by the refreshing sea breeze and the constant sound of tinkling of wind chimes. In the off-season, the streets are mostly empty except for residents and the stray tour group. Shop like a local near the Jaffa flea market, Shuk Ha Pishpishim, where a hip crowd scours the racks at vintage clothing stores. Grab a bite at The Container, an industrial warehouse-turned-seafood restaurant with revolving art displays and live music.

In 2010, after 10 years of renovation, the historic outdoor Hatachana train station  reopened as an entertainment complex with shopping, dining and an outdoor organic market. Trendy restaurants like the new tapas spot Vicky Cristina sit next to stores such as AHAVA and Tzomet Sefarim -- a bookstore and café devoted to art and design. Other storefronts showcase young Israeli and international designers, and there is a stage for fashion shows, theatre performances and other special events.

In 2011, Tel Aviv launched Tel-O-Fun, a citywide self-service bike share program for residents and tourists, the perfect way to tour the city’s new-old hotspots. Over the next five years, the city will spend 150 million shekels to build 150km of bike paths that will keep pedestrians and cars separate in a continuous network that covers all of Tel Aviv and links the city to Jaffa’s bike paths.