my family is traveling to Israel in May. Where can we find a cheap hostel relatively close to Beersheva?

How cheap is cheap? B/c I don't think that any hotel near B-S should be expensive, and furthermore, most hostels in that area are going to be beyond hostel-level dumpy. I would recommend consulting the Yahoo! city travel guides and finding the highest rated hotel in B-S that you can find. In Israel, a 3 or 4 star hotel is like a 0-2 star hotel in the US, so your safest best is to go for a 5 star hotel if one exists and is reasonably affordable.

In the Beer Sheva areas are B&B's. Here is the phone number of one of them its about 15 min. away from Beer Sheva phone 08-6230031 050-5435859 You can send an email. You can search for B&B's by googleing.
http://www.google.com/search?q=B%26B+Beer+Sheva&rls=com.microsoft:he:IE-SearchBox&ie=UTF-8&oe=UTF-8&sourceid=ie7&rlz=1I7GGLD

Go to West bank or Gaza, hotels are cheaper there. You can always take the bus to the city. he he he