Charlie Mulgrew’s penalty after 25 minutes gave the disjointed visitors something of an undeserved advantage and there was no surprise when the hosts levelled in the 52nd minute, midfielder Dor Peretz making up for conceding the penalty through a barge on Steven Naismith with a close-range finish.
Scotland were reduced to 10 men in the 61st minute when defender John Souttar was sent off for picking up his second yellow card before defender Kieran Tierney turned a cross from Beram Kayal past Allan McGregor with 16 minutes remaining.
After an encouraging 2-0 win over Albania in their section opener at Hampden Park last month, this was a dismal performance from Alex McLeish’s side notwithstanding the fact they played the last 30 minutes a man down.
The Scots face a final double-header against Albania and Israel next month and will now be looking for two wins to resurrect their play-off hopes.
It was the first home game for Israel boss Andreas Hertzog who named Munas Dabbur, the man who scored a brace for RB Salzburg in their recent 3-1 Europa League win over Celtic in Austria, in attack with former Hoops player Kayal in midfield.
The home side had won only one of their last 10 matches which, in part, saw the stadium well short of its 30,000-plus capacity.
Israel looked the more dangerous in the scrappy opening stages and in the eighth minute Dabbur headed just over the bar following a Bibras Natcho corner.
Scotland, unchanged from the Albania match, offered encouragement to the home side and McGregor had to make a save at point-blank range from a Peretz header.
The home side and fans, however, were stunned when Polish referee Daniel Stefanski judged Peretz to have barged Naismith inside the box after the Hearts striker latched onto an Andy Robertson pass, and Mulgrew confidently stepped up to hammer the penalty past keeper Ariel Harush.
Israel came back strongly and striker Ben Sahar skied a chance over the bar before McGregor had to make a save from a Kayal drive, with the Rangers keeper then watching a long-distance effort from Dabbur just clear the crossbar.
The Scots were toiling. In the 39th minute Sahar sent an angled-drive against the post after escaping from Robertson and Stephen O’Donnell cleared the danger when the ball was returned across goal. The first-half finished with McGregor parrying a powerful volley from Dabbur.
Aberdeen defender Scott McKenna replaced Mulgrew for the start of the second half but McLeish’s side continued to struggle.
The almost inevitable leveller came when Taleb Tawatha picked out Peretz who got the better of Robertson before poking the ball into the far corner of the next from eight yards.
Scotland were all over the place and things got worse when Souttar, booked in the first half for a foul on Dabbur, picked up a second yellow for catching the same player in the face with his hand at the edge of the box.
McGregor saved Kayal’s free-kick and minutes later Tawatha somehow hit the bar from inside the six-yard box but there was nothing the Ibrox keeper could do when Tierney sliced a Kayal cross past him and into the net.
Scotland left gaps as they pushed for an equaliser.
Callum McGregor stung the palms of Harush with a 25-yard drive but seconds later his goalkeeping namesake made yet another save, this time from substitute Dia Seba and the home side comfortably saw the game out, with the Tartan Army venting their displeasure at the final whistle.