For works that cover the period before the founding of the State of Israel in 1948, you should use "Palestine" rather than "Israel" as a subject heading. This policy is based on the directive in the Subject Cataloging Manual H 980, #3 about the use of "Palestine" as a subject heading:
"Assign the subject heading Palestine to works about the region on the eastern coast of the Mediterranean Sea that in ancient times was called the Land of Canaan, later the kingdoms of Israel and Judah, and in modern times comprises the entire state of Israel, as well as the various disputed territories."
However, when you are subdividing locally, instruction sheet H 830, #1 is relevant. It states: "When subdividing locally, use the latest name of any entity whose name has changed during the course of its existence, regardless of the form of the name or period covered in the work cataloged." An example of such usage, clearly applying to the period before 1948, would be: 650 #0 Bronze age $z Israel $z Galilee.
Also, instruction sheet H 980, #3 has an important additional directive about the heading "Palestine":
"Do not use this heading to refer specifically to the territories that are being transferred from Israeli to Palestinian control by agreements between Isael and the Palestinian National Authority negotiated in the 1990s. Use the headings West Bank and/or Gaza Strip, as appropriate, to refer to these geographic areas."
This same instruction sheet is important to consult also for other questions involving Jerusalem, the Gaza Strip, the Golan Heights and the West Bank. For example, #1 directs:
"Assign Gaza Strip, Golan Heights, Jerusalem, and West Bank directly after topics without interposing the name of any larger geographic entity." One example: 650 #0 $a Public health $z West Bank. "Divide localities that are entirely within the boundaries of the Gaza Strip, Golan Heights, or West Bank through those headings." One example:
650 #0 $a Jews $z Gaza Strip $z Gaza.
Peter Kearney