Yes - baggage will go all the way to AGP.
CH is now part of Schengen area - so passport control will take place in ZRH and ZRH-AGP will be a 'domestic'
flight. Your flight will arrive at Terminal E, you will need to take a train to Terminal A/B - AGP will depart from Terminal A.
'domestic' yes, but what about customs? TLV, ZRH and AGP are all different by means of customs.