Thanks for everyone who took the time to reply!
I think everyone can say "May as well get a letter, signed by both parents and notarized" it does not hurt but costs in Israel around 260 Shekel. I assume anecdotes show that generally you can get by without one. My question is - do we NEED this?
Yes you need a letter from BOTH parents and get it notorized.
can you elaborate?
I am sorry I was not more clear.
In the meanwhile, here is what I found out so far; according to LY agent, "there is a form on the Elal site, because both tickets are on one reservation (minor and accompanier) it should be fine. However maybe in the USA for the return they may need something. May as well get a notarized letter" I can not view it on my computer so I will try to check tomorrow.
According to Customs and Border Protection (CBP) of the USA, found by Amex concierge, we do not need one for the USA but the highly recommend getting a letter from the parents just in case other countries, and they suggest that we get it notarized. See below, emphasis mine. I still would like to hear anything clear...
If a child (under the age of 18) is traveling with only one parent or someone who is not a parent or legal guardian, what paperwork should the adult have to indicate permission or legal authority to have that child in their care?
Due to the increasing incidents of child abductions in disputed custody cases and as possible victims of child pornography, Customs and Border Protection (CBP) strongly recommends that in the case of a child traveling with grandparents, uncles or aunts, sisters or brothers, friends, a note signed by both parents) stating "I acknowledge that _______ (name)_______ is traveling out of the country with my son/daughter/group. He/She/They has/have my permission to do so." CBP also suggests that this note be notarized. While CBP may not ask to see this documentation, if we do ask, and you do not have it, you may be detained until the circumstances of the child traveling without both parents can be fully assessed. If there is no second parent with legal claims to the child (deceased, sole custody, etc.) any other relevant paperwork, such as a court decision, birth certificate naming only one parent, death certificate, etc., would be useful. Adults traveling with children should also be aware that, while the U.S. does not require this documentation, many other countries do; failure to produce notarized permission letters and/ or birth certificates could result in travelers being refused entry.