Heritage: Civilization and the Jews. Abba Eban, 1984. A short, simple, clear, popular history, with lots of pictures. Covers every aspect of Jewish history, but focuses on Israel.
A History of Israel. Howard Sachar, 1996 2nd ed. (originally (Vols. I & II), 1979 & 1987). A long, thorough, readable history of Zionism and the modern State of Israel - mostly politics, also culture and thought.
The Source. James A. Michener, 1965. Historical fiction, telling the millennia-long story of one plot of Israeli land. An enjoyable literary way to fill in the history many of us lack.
O Jerusalem! Larry Collins & Dominique Lapierre, 1972. A great, suspenseful, balanced narrative of Jerusalem's precarious place during the 1948 Independence War. Must read.
The Zionist Idea: A Historical Analysis and Reader. Arthur Hertzberg, ed., 1959 ff. A great overview of leading early thinkers in their own words; Hertzberg's opening essay is helpful.
The Making of Modern Zionism. Shlomo Avineri, 1981. Excellent, insightful introduction.
Jerusalem, Jerusalem. Lesley Hazelton, 1986. Truly conveys the feelings and ideas of 1970s Israel. (See also her 1977 classic, Israeli Women: the Reality Behind the Myths).
The Israel-Arab Reader: A Documentary History of the Middle East Conflict. ed. Walter Laqueur and Barry Rubin, 1984. From Herzl to Arafat, both sides in their own words.
The Yellow Wind and
Sleeping on a Wire.
David Grossman, 1988 and 1997. Powerful reports from both home fronts,
Israeli & Palestinian, putting a human face on the issues.
Righteous Victims: A History of the Zionist-Arab Conflict 1881-1999. Benny Morris, 2000. Not an easy read, but essential, from the historian who opened new perspectives on '48.
Israel: An Echo of Eternity. Abraham Joshua Heschel, 1967. The State's spiritual significance, poetically presented. See also Mordecai Kaplan's A New Zionism, 1955.
Israel: A Spiritual Travel Guide. Lawrence Hoffman, 1998. 'Companion for today's pilgrim.'
Periodicals: Read the bi-weekly Jerusalem Report; stay current through the Washington Jewish Week. Free, up-to-date news through Ha'aretz.
More on Web: New Israel Fund Links Library can't be beat. For everything: www.virtualjerusalem.com/. For more News: www.israelwire.com/.
I would like to add an addition of my own to Rabbi Fred's suggestion.
Commander of the Exodus by Yoram Kaniuk who just appeared at Politics and
Prose right here in Washington with the real Paul Newman hero, Yossi Harel,
now 82 years old. It counteracts some of the "revisionist" history we heard
about at the retreat in which the Jews were the aggressors and the British
innocent bystanders. The book clearly shows the world was about a
declaration against Jews worldwide, include a vicious assault against the
most innocent of victims-- the children and survivors of Aushwitz and
Buchenwald. It sometimes easy to look at things from the rear view mirror
and ignore the harsh realities of what our ancestors faced in real time when
the very survival of our people was at risk.