Jerusalem
Christ Church Guest House
From what we hear it is a delightful place to stay in. It is very central, being located in the old city itself, right near the Tower of David and the Jaffa Gate, and a walk's distance from the Garden Tomb and the Western Wall (Wailing Wall). Christ Church guest house is run by believers and has mostly believing guests. The cost is about $50 a night for a single person, $80 for double. In the high season it's $60/$90. As of 2006 there was no internet service, but this might change in the future. Beautiful old building, well kept. Has a secluded courtyard and nearby cafe. A good resting place. No air conditioning, but pleasant. And of course, it's B&B.
St. Andrew's Scottish Hospice
The Scottish Hospice is pleasant with a good self-service breakfast. Last we heard, the cost per night is $90, but it's better to check with them. It is in a good central location.
The Montefiore Hotel
The Montefiori Hotel is located on Schatz Street, off of the famous King George Street. It is central and has excellent rates: about $48 per person if you are sharing a double room. It isn't fancy but is very reasonable and you can get deals as well. Contact them at 00 972 (0)2-6221111
Yad HaShmonah
This is a moshav (a communal village) of believers from Finland and from Israel, located in the Judean Hills near Jerusalem. In peak season, they charge at least $165 for a couple. However, the air is crisp, the cabins are made of Finnish pine logs, the surroundings are beautiful, the food is good. You also have access to the swimming pool in the neighbouring village, about a mile up the road.