I just got back from a short visit to Jerusalem, where I had probably the best kebabs ever. It was at Shahin, a tiny hole-in-the wall in the old city where my family used to eat when I was a child. All they serve are kebabs and an incredible hummous.
You go down David st., which is the main market street running from Jaffa Gate and into the centre of the old city. After about 300m on your left is the butcher's alley, and right there, just after the corner is Shahin, best kebeb place in Jerusalem and probably in the word.
P.S. The picture is from the old city but unrelated.