You must try bargaining in the Arab Market. In the old city of Jerusalem, the Via Dolorosa is the path pilgrims take and they walk right by the most fabulous shops in the country. There are food shops, clothing, jewelry, furniture, rugs, souvenirs,....just about everything you can imagine. All the Arab vendors will ask you to sit and have a cup of Kaffe. watch out, that stuff is lethal.

The coffee is flavored with cardomum and is very strong. You'll be given a thimble full and believe me, that's enough to power a jet plane for about a week. Of course, you can decline the Kaffe, but you must be very careful how you say no or you might insult the shop owner.
After the Kaffe, is the time to try your bargaining skills. Ask the price of an item, deduct one half the amount and make an offer. The shop keeper will come down a small amount and tell you how much better his product is than the guy next door (who's his brother, cousin, uncle, father, etc). Pause a moment (not too long, or he'll think he has you) and make a second offer a little higher than the first. He'll smile and tell you how wonderful the piece is and he's losing sooooooooo much money, but "for you, I'll let you have it at that price". then be aware you'll be offered Kaffe again while it's being wrapped. it's wonderful fun!

Silver products, especially bedoine jewelry
Cashmere, pashmina scarves, shawls
Olive wood products from boxes and furniture to Christmas tree ornaments
Wine
Olive oil
Dead Sea mud products

about 2/3 of whatever it's priced. Bargain away, it's expected and encouraged