Santa Claus is a Christianity-based concept - reflecting the
great gift-giving by God to himanity in the birth of Jesus.
Israel is a largely Jewish state.
Jews do not celebrate Christmas, nor do they "do" Santa Claus.
They have their own somewhat similar festival.
However, any Christians in Israel would most likely call Santa
Claus "Santa Claus", as the name is now becoming almost
universal.... taking over from the different localised names that
different countries used to use.
Related Q&A:
How do you say Santa Claus in Israel?-Well, in Israel, they usually say \Santa Claus\ as \???? ?????\ pronounced as \Santa Klaus\ But you know, different regions might have their own little variations or local names for it. It's kind of interesting how language works and how different cultures adapt and give their own spin to common words and figures like Santa Claus. Isn't that neat?