Hi BelovedBird,
The only Baha'is who live in Israel are those invited to serve (for a specific period of time) at the Baha'i World Centre in Haifa. The Baha'i Faith has close ties to the Holy Land since Baha'u'llah, the Prophet Founder of the Baha'i Faith, was exiled from Persia throughout the Ottoman Empire (first to Baghdad, then Adrianople (Edirne) and Constantinople, and finally to Akka). He spent many years at the end of His life as a prisoner there. It is a sacred place to us as well; all Baha'is are exhorted to undertake a pilgrimage there at least once in their lives if possible - my family went when I was a child and I still remember the smell of the orange blossoms in the gardens. . .

Baha'is do not teach the Baha'i Faith in Israel or accept converts in Israel so that there is no misunderstanding of our intentions there.
The Shrine of the Bab is the white building with the gold dome from which the terraces and gardents flow. There are Baha'i holy places on Mount Carmel and vicinity. (The Bab - the "Gate" - was the forerunner, announcing the coming of Baha'u'llah - He was executed in Shiraz, but His remains were moved to Haifa years later)
The Baha'i Faith does prohibit proselytizing or coercion; we are encouraged to share the Message of Baha'u'llah with those who are interested, but we are not permitted to pressure anyone to convert. There is a metaphor in the Baha'i Writings of offering the teachings of Baha'u'llah to someone in the spirit of offering a gift to a king. If it is accepted, well and good; if not, we don't push.
For those who wish to become Baha'i, the process of conversion is two-fold, I guess. The most significant part would be something that happens within a person - when that person accepts Baha'u'llah and His teachings. Each country has an administrative process of enrolling someone in the Baha'i community afterwards - in the US, a person would sign a card to be formally enrolled in the community. There is no clergy in the Baha'i Faith, so each individual is ultimately responsible for his/her spirtiual development and deepening in the teachings of Baha'u'llah - a life-long process of conversion, really! There are elected administrative bodies called Spiritual Assemblies in each locality that direct the community life of the Baha'is who live in that town/city, but the spiritual development of the individual is the responsibility of the individual and God.
Baha'is believe that each spiritual revelation from God comes with two sets of teachings: the timeless, eternal spiritual teachings that they all share (belief in Divinity, the "Golden Rule", etc.) and which is renewed with each successive revelation, and the material/social teachings that are especially suited for a particular stage of development in human history. Another analogy: imagine a collection of very different lamps - the lamps represent the different material teachings of the world's religions but the light which illuminates them (the spiritual teachings) is the same. We are encouraged to look to the light and its Source (God) and not focus on differences between the lamps.
So there are spiritual and material/social teachings and laws in the Baha'i Faith. Baha'is believe that there is one God, one religion that is renewed periodically (every thousand years or so) by God, and one human race. We believe that the reality of the world is that it is unified; the strife and bloodshed that we see is the result of humanity turning its back on the reality that we are inextricably interdependent. There's a website that has a nice description of the purpose of human life:
http://www.us.bahai.org/global/purpose.htm
(actually the rest of the site is good too!)
And here's another site:
http://www.bahai.org/
There are "rules" (we call them laws) that individuals are to follow: prayer, meditation, annual period of fasting (from sunrise to sunset for 19 days), service to others, etc. The second website is pretty good at discussing those. I'm getting long-winded here, so I'll leave it at that!
I hope somewhere in ALL of that, I've answered most of your questions! LOL! Please feel free to ask any others you may have
