Scotland were perfect from 12 yards to book a European Championship showdown with Serbia next month.
After a turgid goal-less encounter, Scotland finally prevailed on spot-kicks, booking their place in Belgrade next month for the play-off final.
All five Scotland players found the net in the shootout, with a David Marshall save from Eran Zahavi proving decisive.
That left Kenny McLean, who only appeared for the last seven minutes of extra-time, to score with the final kick to earn Scotland a lifeline in their pursuit of a major tournament berth.
Steve Clarke persisted with the three at the back from the Israel game last month, with Scott McTominay continuing in the backline along with Declan Gallagher and Liam Cooper. Lyndon Dykes was partnered up top by Sheffield United striker Oli McBurnie.
After weathering a period of early Israel pressure, Scotland began to fashion chances for themselves. Callum McGregor’s floated cross fell perfectly for Dykes to chest down to John McGinn, who lashed over Ofir Marciano’s crossbar.
They came closer through an Andy Robertson free-kick, after Dykes was upended in brutal fashion by Sheran Yeini. Robertson’s set-piece dipped but did not have the angle to creep inside the post.
Hatem Elhamed was proving to be Israel’s main outlet and caused Scotland problems drifting out to the left. The one shot he had towards goal, however, was turned behind by McGregor and Robertson cleared the resulting corner.
Scotland’s glaring chance came five minutes before half-time that had plenty of a Tartan Army persuasion scratching their heads. Robertson’s right-wing corner picked out an unmarked McTominay at the back post, who appeared set to guide the home side in front. His header dipped wide of Marciano’s sprawling dive and somehow the wrong side of the post.
It was not the precursor to a swathe of Scotland chances after the break. The supply line to Dykes and McBurnie was minimal. Eyal Golasa collecting a ricochet off Ryan Jack and arcing a shot narrowly over the bar had hearts in mouths.
Scotland players appealed en-masse for a penalty before the hour, with Elhamed’s clearance coming off the arm of team-mate Eytan Tibi. Referee Ovidiu Hategan – plus VAR official Marco Guidi – did not see enough in it to point to the spot.
That was little else Scotland had to cling to, with Israel and their goalkeeper Marciano seldom being troubled. Lawrence Shankland and Ryan Fraser were roused in place of McBurnie and Ryan Jack but extra-time seemed certain.
The additional period yielded little in the way of action, as frustration grew and time ebbed away. Fraser’s introduction had given them an injection of pace but his darts were infrequent enough to cause little damage.
An Elhamed cross crawled agonisingly past the far past at the tail-end of extra-time, before Cooper connected with a header that hit the outside of the post with the final kick.
John McGinn squeezed his spot-kick under Marciano before Marshall saved from Zahavi. McGregor, Nir Bitton, McTominay and Shon Weismman traded successful kicks, before Shankland put Scotland on the brink.
Mohamed Abu Fani kept Israel in the shootout only for Kenny McLean to net the decisive kick.