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Using US Dollars in Israel ?

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My husband and I will be in Israel for two weeks in October. We are fairly seasoned, independent travelers, but this is our first trip to Israel; we will be on a group tour. When traveling in Europe we always use ATM's to obtain the local currency.

The tour coordinator has advised us that carrying shekels is not necessary - that everyone accepts US Dollars. We had planned to use ATM's to withdraw some funds to cover miscellaneous purchases (lunch, postcards, small items) and credit cards for sourvenirs, gifts, etc. I should point out that all breakfasts and dinners with wine are included in the tour.

What do you think? Should we go with the US dollars only plan or use an ATM? Many thanks in advance for your assistance.

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