Jerusalem's Old City is wonderful. On my TWA flight there three years ago, the current copy of National Geographic had a photo essay of Jerusalem...with the incredibly detailed map still in the magazine. I'll admit, it wasn't in the magazine when I got off the plane (but it was the end of the month, so I figure the issue was due to be replaced anyway).
In any event, try to get a good map. Finding your way around is as difficult as in Venice, but the safety issues of getting lost (particularly in the Arab quarter) are more problematic than in Italy!
For that day trip to Masada (definitely a "must"), see if you can find one that includes a stop at the Dead Sea as well as Ein Gedi nature preserve. Or just rent a car so you can do all at your own pace.
There's an excellent museum of Islamic art; it's open on Saturday when most of Jerusalem is shut. But be sure to spend part of Saturday morning in the Jewish quarter - lots of great photo opportunities, but you should probably pass unless you have a very long telephoto lens, since taking a snapshot constitutes "work" which is prohibited that day (and would therefore be offensive to the subject).
And whether you're Muslim, Christian or Jewish (or none of the above), be sure to visit all three religion's sites, not just your own.
In the Old City near the New Gate (I think it's on Fréres Street) is a shop run by two Greek Orthodox women that sells needlepoint made by Palestinian women. It's basically a charity they've put together, since Palestinian women have next to no earning capacity outside the home. Everything from pillow cases to table runners to vests to priest's stoles, at dirt cheap prices.
[This message has been edited by johna (edited 10-12-1999).]