This is definitely an interesting find.
One thing is for sure: The writing is Hebrew, no doubt about that. But it appears to be formal hebrew, which is something I have not seen on ancient coins. This would incline me to lean toward a modern souvenir coin.
I have forwarded a picture of your coin to an expert in ancient Jewish coins.
UPDATE: I already heard back from Bill Rosenblum of William M. Rosenblum, LLC, an expert in rare and ancient coins, and he confirmed what I thought. Here what he said:
Neil
You are correct this is not an ancient coin but a fantasy taken from a small bronze coin of the Bar Kochba revolt 132-135 CE. As you noticed it uses modern Hebrew to read Jerusalem on the palm tree side and For the Freedom of Jerusalem on the sides with the grapes. It should have ancient Hebrew instead.
Your find has probably been lying in the dirt/mud for quite awhile and has become somewhat corroded as these are usually fairly well manufactured and fairly modern. I would think they were made no earlier than the late 1960's.
I get inquires about this and a similar coin 20 or 30 times per year. It has no collector value as a coin and selling it as a coin is probably illegal. But if cleaned up it would look nice in a bezel.
Happy Hanukkah
Bill
Here is a little background on the symbols:
The palm tree and the palm branch figured frequently on Jewish coins. Palms symbolized water, around which they grew. From biblical times, palms had symbolized fertility, and height, as well. Palms were a symbol of Judea because they grew plentifully there. This meaning expanded, with the palm becoming a symbol for all of Palestine, and later, Israel. The Romans were apparently familiar with the meaning this symbol had for the Jews. After the First Revolt of the Jews was suppressed in 70 CE, the Roman emperor Vespasian minted a coin celebrating the nation's subjugation with the image of a palm tree flanked by a bound Jew and mourning Jewish woman. The coin's inscription read Judea Capta.
Clusters of grapes appeared on the coins of the Second Revolt, and grape leaves adorned the coins of both the First and Second Revolts. Grapes symbolized wine, an important product of Judea and Palestine. In the books of the prophets, the grape vine served as a symbol of Israel. It was also a symbol of blessing and fertility — Israel will grow as the vine (Hosea 14:8); Thy wife shall be as a fruitful vine (Psalm 128:3). Later, in the Talmud, the symbol grew grander: the vine was the world, Jerusalem, and the Torah, while the grapes symbolized the Patriarchs, the Sanhedrin and the scholars. Grapes were said to decorate the Temple's ritual vessels, and golden vines guarded the entrance to the sanctuary.