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When you take taxis in Israel, try to use exact change to pay your fare. Here's an example of what can happen if you use larger bills expecting change:
The taxi cab fare is 87 shekels. You hand the driver 200 shekels and they wave a 20 shekel bill back at you saying it is not enough. You second guess yourself and hand him another 200. Again he says it is not enough. If you had the opportunity to check the floor of his cab (and this is NOT encouraged), you would likely find one or more of your 200 shekels.
It is reported that this does not happen often, but to protect yourself (and your shekels), using smaller bills could be the best alternative.
If you have the name of the driver and company of the taxi, you can make a formal complaint and the authorities will assist you in receiving your money back. The taxi driver is liable for his actions and in many cases could lose his right to drive a taxi.
In addition, always ask the driver if he has change if you're planning on paying with a 100 / 200 Shekel bill.
Another thing, have the driver run the meter. Many drivers, particularly for short trips, try to avoid the meter and when you get to your destination will quote a high price for the trip. If you question them they will ask you to suggest a fare. Since you usually don't know what it should be, you may overpay anyway. This is also another reason for having smaller bills so you can tender the proper amount without having to haggle for how much you are going to get back.