Jerusalem has a huge selection of restaurants, dairy bars, lunch counters, snack shops, delicatessens, and cafes.
In the Old City and East Jerusalem, you'll find mostly Middle Eastern cuisine. Pork is prohibited to Muslims, as it is to Jews, but you will find pork and shellfish in East Jerusalem restaurants catering to tourists or Christian Arabs. There are no kosher restaurants in East Jerusalem or in the Old City except in the Jewish Quarter. The Old City has plenty of snack stands and inexpensive Arab restaurants. Most Old City eating places are open daily from late morning to 5 or 6pm.
In West Jerusalem, the dining scene is quite different. Downtown West Jerusalem has tons of restaurants, and places for a quick meal, and most places are open until very late at night. You'll find pedestrian streets that are wall-to-wall eating places, but thanks to the years of terror attacks (2000-03), many of the best restaurants in town have moved to hidden courtyards, quiet, slightly out-of-the-way streets, and to old Ottoman-era mansions surrounded by walled gardens. Almost every restaurant or cafe has a security guard at its entrance (and many charge a security fee that's worth the peace of mind). The many ethnic restaurants (Yemenite, Israeli, Kurdish, Eastern European) that travelers loved have mostly gone. Like Tel Aviv, Jerusalem has an oversupply of personal, vaguely French/Mediterranean restaurants overseen by talented, inventive chefs. Meals are interesting, of good quality, and not cheap, but almost all restaurants offer incredible "Business Lunch Specials" from noon until 5 or 6pm that make them very affordable.
Sabbath Dining -- Kosher restaurants usually close by 2 or 3pm on Friday for Shabbat. The following nonkosher restaurants, described in detail later, have Friday evening or Saturday afternoon hours and provide a good variety of choices. Downtown West Jerusalem: Adom, Barood, the restaurant at the YMCA, Eldad Vesayhoo, Sakura, Spaghettim, McDonald's, Arcadia. In South Jerusalem: Cacao at the Cinémathèque. East Jerusalem: American Colony Hotel, Blue Dolphin, Askidinya, Pascha, Kan Zeman at the Jerusalem Hotel.
Catching Restaurants at Their Best--Saturday night is very big for dining out in Israel, but because kosher restaurants often prepare food for Saturday night on Thursday before closing for the Sabbath, and because nonkosher restaurants will not have received fresh fish and vegetables for 2 days, you won't find restaurants at their best. If you're going to splurge at a top restaurant, do it midweek.