Viticulture has existed in the land of Israel since biblical times. In the book of Deuteronomy, the fruit of the vine was listed as one of the seven blessed species of fruit found in the land of Israel. The location of Israel along a historic wine trading route between Mesopotamia and Egypt brought wine-making knowledge and influence to the area. Wine played a significant role in the religion of the early Israelites with images of grape growing, harvesting and wine-making often being used to illustrate religious ideals. In Roman times, wine from Israel was exported to Rome with the most sought after wines being vintage, dated with the name of the winemaker inscribed on the amphora. In the 7th century, the Islamic conquest of the Middle East virtually wiped out the region's wine industry with wineries closing down and vineyards, planted with now lost indigenous grape varieties, pulled out. Winemaking was temporarily revived in the Crusader states from around 1100 to 1300 but the return of Islamic rule and the subsequent Jewish Diaspora extinguished the industry once again.
In 1848, a rabbi in Jerusalem founded the first documented winery in modern times but its establishment was short lived. In 1870, the first Jewish agricultural college, Mikveh Israel, was founded and featured a course on viticulture. The root of the modern Israeli wine industry can be traced to the late 19th century when the French Baron Edmond de Rothschild, owner of the Bordeaux estate Château Lafite-Rothschild, began importing French grape varieties and technical know how to the region. In 1882, he helped establish Carmel Winery with vineyards and wine production facilities in Rishon LeZion and Zikhron Ya'akov near Haifa.
For most of its history in the modern era, the Israeli wine industry was based predominately on the production of Kosher wines which were exported worldwide to Jewish communities. The quality of these wines were varied, with many being produced from high-yielding vineyards that valued quantity over quality. Many of these wines were also somewhat sweet. In the late 1960s, Carmel Winery was the first Israeli winery to make a dry table wine. It was not until the 1980s that the industry at large saw a revival in quality winemaking, when an influx of winemaking talent from Australia, California and France brought modern technology and technical know-how to the growing Israeli wine industry. In 1989, the first boutique winery in Israel, Margalit Winery, was founded. By the 1990s, Israeli estates such as Golan Heights Winery and Domaine du Castel were winning awards at international wine competitions. The 1990s saw a subsequent "boom" in the opening of boutique wineries. By 2000 there 70 wineries in Israel, and by 2005 that numbered jumped to 140.
Today, less than 15% of Israeli wine is produced for sacramental purposes. The three largest producers—Carmel Winery, Barkan Wine Cellars and Golan Heights Winery—account for more than 80% of the domestic market. The United States is the largest export destination. Even though it contains only around one-quarter of the planted acreage as Lebanon, Israel has emerged as a driving force for winemaking in the Eastern Mediterranean, due to its willingness to adopt new technology and its large export market. The country has also seen the emergence of a modern wine culture with upscale restaurants featuring international wines dedicated to an ever increasing wine-conscious clientele.
For centuries, wine has been at the centre of Jewish communal life, an essential element at religious rituals and ceremonies all year round.
The Jewish people have a special relationship to wine that predates even the Romans and Greeks. For the ancient Jews, whose temple in Jerusalem was renowned throughout the fledgling civilizations of the Middle East, wine played an important role in religious ritual. Today, thousands of years later, it continues to do so. Kiddush, the prayer over the wine, traditionally announces the beginning of the Sabbath on Friday night as well as other holidays.
(The information is taken from Wikipedia)