Answer ... In cases where an unregistered foreign trademark is well known in Israel, the rights may be enforced by bringing a trademark infringement lawsuit under the Trade Marks Ordinance.
In certain circumstances, unregistered foreign trademarks which are not well known may be enforced under various unfair competition laws, including Section 1 of the Commercial Wrongs Law (passing off), the Law of Unjust Enrichment and possibly also the Chattels Law.
Answer ... Yes. The Madrid Protocol has been effective in Israel since 2010. Since then, the Trademark Office permits registration of a mark through local designations of foreign international (Madrid) registrations. However, these designations are subject to the same examination and possibility of opposition/revocation/cancellation as national trademark applications/registrations.