The words are Hebrew, but according to Wikipedia, the phrase itself (at least in current usage) is of Yiddish origin, from whence it was incorporated into Modern Hebrew. The pronunciation also differentiates it: "MA-zel TOV" is Yiddish, while "ma-ZAL TOV" is Hebrew.

Sadly, as a practitioner of the language, I must admit (opine?) that very few things actually sound better in Hebrew than in pretty much any other language, with Dutch being a possible exception. (Languages with gutterals and glottal stops generally are not that pretty.)