The public's problems with Street View began simply enough, with citizens in Germany and elsewhere wanting their homes and businesses left out of the service due to privacy concerns. Then, when Google admitted its cars has "accidentally" recorded private information -- including emails -- from public wifi networks, the stuff really hit the fan. (If you'd like a refresher on all that, start here and work backward.)
The situation in Israel is slightly more sensitive, because Israel has been the subject of numerous terrorist attacks. The typically tech-friendly country (home to one of Better Place's larger EV experiments) is worried that terrorists could use Street View to help plot future assaults on Israeli soil. And so, government officials and Google sat together and worked out a series of restrictions to ensure that (a) Google is sensitive to potential problems and (b) the Israeli government has the right to blur or remove images from the service.
And it's not just government drones who will be able to alter Street View views: according to Haaretz, everyday users will have "an efficient, reliable way to blur images of license plates, places of residence and other objects". Google is also required to alert the public about the routes of its Street View cars, and those cars will need to be very clearly marked.
There are other, unspoken limits, too. For example, Google Street View cars will only turn their cameras on the cities of Jerusalem and Tel Aviv. There are as yet no plans to roll cars into the far more sensitive areas of the West Bank or the Palestinian territories.
This seems like great news for Israel, Google, and peace advocates, too. It's encouraging to see that a country so sensitive to security issues has agreed to share important mapping information with the world. And it's nice that an 800 pound tech gorilla like Google has been so accommodating -- though if Google Street View hadn't had such high-profile screw-ups in the recent past, would it be playing so well with others?