Previous answers from 26/10/11
1. Go to www.moin.gov.il/Pages/default.aspx
where you can pay by credit card and fill out the form on the computer. Print the form and send it by registered mail. It takes about a week if you do it during the off-season (starting from next week).
2. If you go to the misrad hapnim you should have it in a couple of days
3. The most efficient way is to combine the two. Print the form from the website and fill it out. Take the form and passport to the misrad hapnim downtown. Get the envelope from the information desk upstairs and put it in the box for passport renewals. You should get it in a day or two (I once got it the same afternoon!).