A: use this patched version of algorithmic.sty instead.
The following bash script worked for me when adding Hebrew support (Ivritex/Culmus) to my MacTex (2007) distribution, under OS X 10.5 (Leopard).
I hope it will be usefull for you as well.
The script assumes the wget commandline utility is installed on your system (either install it or see the comment on top of script for instructions).
During the execution, you will be asked for a "Password:". Provide your root password.
The following document is an example of using Hebrew in LaTeX documents. Note that the file is in utf-8 encoding.
(compile it with
pdflatex hebexample.tex, or in TeXShop)
(from http://www.ma.huji.ac.il/~sameti/hebrewlyxwin/) - download and run: http://www.ma.huji.ac.il/~sameti/hebrewlyxwin/culmus.exe - then from the command prompt: initexmf -u initexmf --mkmaps(See Hebrew in LaTeX documents above for usage)
This doesn't really work.
BUT, a possible workaround is using the cjhebrew package.
This requires writing Hebrew according to some weired transliteration, and not being able to incorporate punctuation directly in the Hebrew text. In addition, the fonts aren't that attractive (unless you are really into the biblical script).
Manual | example .tex, .pdf