I would venture to say that the vast majority of Israelis drink tap water. We do and most of us are Israeli
I think a larger % of Israelis drink tap water as opposed to bottled water, than the % of NYers that do the same (though home mini water coolers, that might have filtration are more popular in Israel than in NY).
While I think my taste buds are very discerning, I drink tap water both in NY and in Israel (though I mostly drink Seltzer, and good Seltzer is hard to come by in Israel, and the small bottles are outrageously expensive for the small volume).