Can a foreign company insist on arbitration outside Israel in a contract with an Israeli business?

Yes. Under Article 1(2) of the ICA Law 2024, parties are free to choose any seat of arbitration. Israeli courts will enforce arbitration agreements specifying a foreign seat. Common choices include London, Paris, Singapore, and New York. Awards made at those seats are enforceable in Israel under the New York Convention, to which Israel has been a party since 1959, through a recognition application to the competent District Court under Article 35 of the ICA Law 2024.