Modern Israeli coinage started in 1949 with the 25 mil coin. This coin, using the old British system of currency, was very short lived, lasting only 18 months before Israel decided to introduce its own currency, the Israeli Pound. This coin was the beginning of the idea to have designs based on ancient Israeli coinage or other archalogical material, with an engraving of a grape bunch on the obverse side from the coins of the second revolt of Bar Kochba, (132-5 A.D.)

Once the state of Israel was well established, the government wanted a new currency. Leo Kadman and Hanan Pavel, along with Otte Walish, a graphic designer, created the coins, which were approved by the finance minister, Eliezer Kaplan. Since the state wanted to connect its modern country with that of Biblical Israel, they decided to name the new coin a prutah, the amount that the Talmud declares that the item used to engage a woman must be worth. The new series contained many different types of coins, including Aluminum, Copper, Copper-Nickel, Steel-Nickel, and Silver-Copper-Nickel. The coins included a 1, 5, 10, 25, 50, 100, and 250 Prutot Coin. Interestingly, originally the 5 and 10 prutot coins were minted as 5 and 10 pruta (singular, not plural) coins, and the 10 prutot coin was corrected, whereas the 5 was not. The coin series lasted until 1960, when Israel decided to change the type of small change it used, and instead of having 1000 prutot to the pound, they had 100 agurot.

The word Agurah comes from 1 Sam. 2:36; "And it shall be that anyone left over of your family will come to bow down to him for a small coin (L'agurot Kesef, to a agurah of money) or a loaf of bread..." The new coins were more normal mixtures of metal, and in addition to the 1, 5, 10, and 25 Agurah Coins, there were 1/2, 1, and 5 Pound Coins, to replace banknotes as they were taken out of circulation between 1963 and 1978.

Due to inflation, Israel, in 1980, decided to create a different currency system, with new Agurot worth 10 old agurot, and a Sheqel worth 10 pounds. The changeover was planned for 2 years, mostly in secrecy. The coins in the original series of 1, 5, and 10 agurot were copies of the previous series, excepting names and dates. The series, until then lacking them, added a 1 sheqel coin, then a 5, 10, 50 and 100, successively, as inflation increased. The designs for the new coins were decided in contests, and are some of the most beautiful Israeli coin designs, including the Double Cornucopia on the 5 Sheqel peice, in my opinion the single most beautiful design in Israeli Coinage. The 50 Sheqel coin also introduced the idea of special, commemorative coins, the first being of David Ben-Gurion.

The current series was put into place in 1985, with 3 zero's being taken from the end of sheqalim to make New Shekalim, and New Agurot replaced with regular Agurot. The 1, 5, and 10 Agurot coins kept the obverse of the previous series, and the 1/2 Sheqel, Sheqel, and 5 Sheqel peice have new designs, and well as the 10 sheqel piece, which consists of a ring made of steel surrounding and an interior made of bronze, for a very interesting looking coin. The five and ten Sheqel peices have both had commemorative editions, though I am unsure of whom it was they were of.

Almost all of my information is from http://www.bankisrael.gov.il/catal/cataloge.htm, everything else is personal knowledge

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