According to the Water Authority of Israel, Israel's water economy is on the brink of a crisis. Demands are increasing, exceeding the capacity of the natural sources, which are being depleted. Water, as a resource in short supply, necessitated administrative actions in order to attain its efficient utilization, in accordance with the goals set by the state. In addition, the issue of water allocation in Israel is strongly connected to internal politics and not necessarily to a clear overall policy. This article presents a simulation model which examined a large number of different scenarios and returns the possible outcomes of water allocations in a routine situation of uncertainty. The findings show that even under ideal conditions, a water shortage in Israel is inevitable and urban consumption will demand the largest allocation of water. As a result, the Israeli rural sector will be required to reorganize the water allocation system and production structure.