The Associated Press is reporting that Israeli customs is confiscating iPads "citing concerns that its wireless frequencies are incompatible with national standards."
The iPad’s wireless capabilities are limited to IEEE 802.11n and Bluetooth (see Apple’s iPad specifications page, for example). The 3G iPad hasn't been released yet, though that ought not be a concern either – if the iPad comes from the U.S., the 3G will be the same as that of U.S. iPhones, and the Israelis aren’t confiscating iPhones from U.S. travelers.
Bluetooth can't possibly be a concern, and 11n really oughtn't be either – there are any number of 11n products sold – and even manufactured in Israel. Metalink, for example, is a leading Wi-Fi maker, has had 11n- (draft and now regular) certified products since at least 2007, and is based in Israel.
IsraelTech.net has a nice post on this pointing out that the iPad’s wireless is based on a BroadComm chipset that combines low-power 802.11n with Bluetooth. Not only should it’s lower power use be less of a problem than other 11n chips, it’s the same BroadComm chipset as versions of the iPhone and iPod Touch currently available in Israel.
IsraelTech suspects that “the authorities” are trying to rip off Israeli consumers. I myself would caution them to remember the quote, sometimes attributed to Robert Heinlein, “Never attribute to malice that which can be reasonably explained by stupidity.”