The two-hour concert at Ramat Gan Stadium saw the pop star perform tracks from her latest album, as well as some of her other hit songs.
Midway through the show, she told the 30,000-strong crowd: 'If there is peace in the Middle East, there can be peace in the whole world.'
The tour will run until December and take in more than 65 cities worldwide.
'I chose to start my world tour in Israel for a very specific and important reason,' the singer said.
'As you know, the Middle East and all the conflicts that have been occurring here for thousands of years - they have to stop.'
'If we can all rise above our egos and our titles and the names of our countries and our religions, and treat everyone around us with respect, then we are on the road to peace,' she added.
However, a number of the singer's dance routines featured guns and violence.
Her performance of Like A Virgin featured Madonna seemingly lowered into a volcano as a virgin sacrifice, while for Gang Bang - she wrestled with armed intruders before shooting them.
The routine for Revolver also saw the star wielding a Kalashnikov rifle, while one of her dancers brandished an Uzi.
The 53-year-old also took a sly dig at Lady Gaga, performing a mash-up of 1989 hit Express Yourself with Gaga's track Born This Way - which many critics and fans have claimed is strikingly similar.
Madonna, dressed as a marching band conductor, sang the lyrics, 'She's not me', into her re-worked version.
Following Tel Aviv, the MDNA tour will move on to Abu Dhabi before dates in Europe, North and South America.
The singer's last tour grossed more than $400m (£261.5m).
From BBC News