While none of the threats are theoretical, in practice they do not regularly impact tourists. An exception is the Israeli-Palestinian conflict, which weighs heavily on regional political stability despite the relatively small geographical areas concerned. To Palestinians and many others the West Bank is "Israeli-occupied" and many Israelis would agree; while others contend that the land is not occupied, but rather, disputed.
It's complicated, but there are sites of unquestionable historic interest in the West Bank and it's not necessarily impossible to visit them. But that doesn't mean to do so is easy or without risk. For these reasons among others (chiefly, the unresolved political issues), this site will focus on travel and travel concerns in Israel proper, i.e. not including the West Bank.
Of course, one of the most troubling geopolitical forces in the region is the fiercely anti-Israel, anti-Semitic Iranian regime and what most diplomats say is its ongoing quest to develop nuclear weapons. While Iran’s open hostility to Israel is no secret, what remains elusive is just how close the country is to assembling a nuclear arsenal. While the influence of radical Islam, impact of the recent revolution in Egypt and Western military intervention in Libya all underscore the seismic changes in the region, it should be noted that Iran's inching toward nuclear armament threatens not just Israel but the United States, particularly the cities of New York City and Washington, D.C., and indeed the entire world.
In light of the stalled Middle East peace process and against the backdrop of political turmoil in many nations beyond Israel's borders, there is always going to be an added element of unpredictability to travel here that you probably won't find in, say, Nebraska.
What does all this mean? The region as a whole is unstable, but that fact alone shouldn't deter you from making your travel plans. After all, you're probably safer going out and about in Tel Aviv or Jerusalem than in your average American city. That's a fact not reflected in many of the travel advisories issued by by the U.S. Dept. of State.
If State Dept. warnings should be taken in stride, it is also true that there is a risk of rocket and mortar attacks from outside Israel's borders; at present the greatest source of this danger is the Hamas-ruled Gaza Strip, but there's danger from the north, too. Some rockets have reached as far as the Israeli city of Beersheva, in the Negev. Also, note that public buses, which have been the target of terrorist attacks, are considered off-limits to U.S. government personnel.
As always, it's a good idea to stay informed. A quality newspaper such as The New York Times or the English editions of popular Israeli dailies Ha'aretz and The Jerusalem Post are all good places to start in terms of timely and reliable information, both before and during your trip.