Hebrew is of course the first language, in hebrew its called 'mother language' (sounds very russian, doesnt it?)
Every Israeli school child will start learning english as a second language during 3rd or 4th grade (if im not mistaken). And in order to finish 12 years of school, your english needs to be at a certain level.
In most schools, when a students get to 7th grade, they need to choose a which third language they want to learn, between french and arabic.
Both are very basic, and arabic (at least when i was at school) wont get you anywhere, since they teach literature arabic and not spoken arabic. It is basically the same as teaching an american biblical hebrew and then setting him off on the streets of tel aviv.
In any case, the arab population of Israel is around 16%, and most Israelis know the basic communication skills in arabic, arabs in Israel definitely speak fluent hebrew. But still, all road signs and directions are written in Hebrew, english and arabic.