Passport trouble

We made aliyah a year and a half ago. We still have only our American
Passports. Are we supposed to apply for an Israeli passport? What is
the process? I am hopefully leaving the country shortly for a week
long visit to the states. What do I need to do?

According to Israeli law - which is not always enforced strictly, but the safe side is best, you need to enter and exit the country with an ISRAELI travel document. There are two kinds - the lassiez passier or תעודת מעבר, which is valid for a maximum of five years and is orange, and the stadard passport, דרכון, which is valid for up to ten years, and is blue.
Both documents can be obtained from your local Misrad haPnim (the wait is bad, but not too bad). Be sure to bring two pictures of yourself, your teudat zehut, and 220 NIS for the passprt (75 for the orange passport).
Passports are generally issued one year after making aliya, and orange passports right after aliyah. If you have no teudat zehut yet, a foreign driver's license or teudat oleh will do.
The passports are generally sent by registered mail and arrive a week to ten days after making them. If you need things speeded up, the מנהל can do it for you, if you ask nicely.
to save time this is a link to the form you want to use for the passport and bring with you.
Misrad haPnim in Jerusalem, Shlomzion haMalka 1, is open every day from 8:00AM-12:00AM, and mondays and wednesdays from 2:30-5:00 PM. Fridays are closed.