Bruno Alves headed Paulo Bento's side in front after two minutes, but the hosts continued to press and drew level through Tomer Hemed, before Ben Basat fired Israel in front.
The hosts doubled their advantage in the 70th minute when Rami Gershon headed past Rui Patricio, but Helder Postiga's 72nd minute close range tap-in and Fabio Coentrao's last gasp equaliser ensured both teams shared the spoils.
Portugal started the brighter of the two teams and went ahead in the second minute, Alves rising highest to meet Miguel Veloso's corner and head past Aouate. Fabio Coentrao then saw his low effort comfortably saved by the Israel number one as the visitors dominated proceedings early on.
Israel looked to force their way back into the encounter, but Basat could only fire wide of Patricio's near post after winning his side a free kick having been played in by Bibras Natcho.
The hosts had been on the backfoot for much of the encounter, but drew level midway through the first half courtesy of Hemed, who turned expertly and fired past Patricio to draw level in Tel Aviv.
Portugal continued to dominate and should have found themselves 2-1 up with 10 minutes of the first half remaining, Helder Postiga doing well to hold off the challenge of Tal Ben-Haim, but the striker could only find the outside of the post with the goal gaping.
The visitors were made to pay for Postiga's miss as Israel seized the initiative five minutes before half-time. Basat was played in exquisitely by Hemed before the former smashed past Patricio and into the roof of the net.
Portugal began the second half the stronger, but it was Basat who came closest after the restart, firing wide from close range.
Postiga saw his effort blocked superbly by Tibi before Veloso fired inches over from the edge of the 18-yard box as Portugal pressed for an equaliser.
Carlos Martins was introduced on the hour mark and almost made an immediate impact, first firing over with a close range volley and then forcing Aouate into action, with the Israeli equal to his long distance strike.
Eli Guttman's side then doubled their advantage with 20 minutes remaining as Natcho's corner found Gershon unmarked to head past Patricio.
Portugal weren't prepared to roll over and accept defeat, however, and dragged themselves back into the encounter when Postiga was on hand to tap in from Cristiano Ronaldo's ball across the six-yard box.
Aouate did well to deny Postiga, before Coentrao netted a dramatic last-gasp equaliser for Portugal as both teams remain level on points with Israel in Group F.