Is it possible to file a small claims action against the state or its agencies (e.g., the police, a municipality, etc.)?

Yes. (For example, in cases of bodily injury/vehicle damage caused by a road hazard; a lawsuit against the Israel Police for wrongful imprisonment; and more.) However, it should be noted that in certain cases, the Small Claims Court lacks jurisdiction to hear a small claims lawsuit against the state, and jurisdiction is vested in specialized courts.

Examples of cases where the Small Claims Court lacks jurisdiction to hear a small claims lawsuit against the state include: a claim exceeding the amount granted to Small Claims Courts; a labor law claim under the Labor Court Law, 5729-1969; a claim on matters where jurisdiction is vested in the Court for Administrative Claims within the framework of a petition/administrative claim under the Courts for Administrative Matters Law, 5760-2000 (e.g., business licensing; environmental protection; freedom of information; decisions of a planning and building committee; and more).