Yes the McDonalds in Israel have some sort of Kosher Happy Meals.
The Kosher McDonalds in Israel are sort of geared to american and foreign tourists who want to eat from a something they all know at home, but cannot have.
Most charedim in Israel do not eat there, not because of the Happy Meals, but rather because of the Hashghcha. Most Charedim in Israel eat from a Hashghacha called Badatz, However the McDonalds are under a Hashghcha called the Rabbanut (Which is the municipality Hashghca run by the government under the Chief Rabbi). Charedim generally do not eat Rabbanut Hashghcha (Some might eat Jerusalem Rabbanut, but not Tel Aviv Rabbanut)