Israel HaYom is reporting that free Wi-Fi will be available throughout the city:
Public wireless network will enable residents of Tel Aviv and visitors to enjoy free high-speed Internet connections. The project will include 80 Wi-Fi relay stations at a cost of around 6 million shekels ($1.6 million).
The installation will be staged and begins shortly. If you are looking for other free hotspots, ride the train. Israel Railways offers free Wi-Fi service on their trains as well as an interesting way to see certain parts of the country.