Hey Dan, why don't you check this out:
http://www.4hoteliers.com/4hots_nshw.php?mwi=5977If it's true (and Starwood Capitol would indeed add it to the spg chain,which Starwood Capitol doesn't always do, especially with some elite brands that they own), we might have some hotels in Israel,(although not really in Jerusalem).
Yet, on further review, Starwood Capitol does not always go hand by hand with SPG, so for now I wouldn't get my hopes high