Yes, the NSA should use its network to spy on Israeli Congress. While spying on private citizens is a breach of privacy, all governments -- particularly those in democracies like Israel -- should feel comfortable in their transparency. Israel is in the center of the Middle East, with significant ties to terrorist organizations. Israeli government also infringes upon the rights of Palestinians, among many other groups in the region. From at least a human rights perspective, the Israeli Congress deserves some investigation from the NSA.
The NSA should not spy on the Israeli Congress because they should not spy on anyone. Humans have a right to privacy and not to be tracked by the government. In addition, Israel is an ally to the United States and spying on their government could reduce trust between the two nations.
The United States and the NSA thinks they are big brother. Even our allies are no longer safe from their watchful eye. What point is there to consider someone your friend or ally when you still feel compelled to spy on them. It is a major slap in the face saying "we don't trust you!" Any good relationship is built on trust.
Since I'm not an American, I'll simply and directly state what every single non-American (including your slaves, pardon... allies from Europe, Japan and South Korea) thinks about your Orwellian Big Brother type of tyranical society and actions toward to the rest of us on this planet: "Get your damn, blood and oil-thirsty money-grabbing-gun-wielding claws, chains and spies away from THE REST OF THE WORLD!!!" Israeli Congress included. Thank you.