From Globes:
Icelandic low-cost airline WOW Air, which announced some time ago that it would begin operating flights to Israel, today announced the beginning of these flights on the occasion of founder and CEO Skuli Mogensen's visit to Israel. Mogensen has twice been named Man of the Year in Iceland, in view of his business success and trailblazing launching of low-cost trans-Atlantic flights from Iceland capital Reykjavik to various destinations. Israeli tourists will be able to continue from Reykjavik to the US on connection flights.
Mogensen thanked [Transportation Minister Yaakov] Katz for his support and the warm reception he received in Israel. "As Paulo Coelho said, 'Impossible is just an opinion.' When we founded the company five years ago, I never imagined that we'd come to Israel. I've dreamed of visiting here since I was a child. Our mission is to enable everyone to fly by offering the cheapest prices in Tel Aviv: from $99 to Iceland and $149 from Tel Aviv to New York, Boston, and Montreal. No one has ever offered such cheap prices to North America, and we're proud to bring competition to Israel. I hope it enables people to visit here, and that it will help Israelis to travel."
It should be pointed out that the quoted fares do not include a luggage allowance, and that it will cost an extra $40-50 to take a suitcase. The fares are also starting prices, and the actual fare will vary according to the date of the flight.
I can't find any fares to Israel yet on their website, although Tel Aviv is listed as a destination.