I'm moving to Israel tomorrow, and I have an iPhone 4 with AT&T. I was thinking that when I get there I could just cancel my AT&T service and then put an Israeli SIM card in my iPhone 4 and sign up for the Israeli service. Would this work?
AT&T phones are locked to AT&T's network. So, in short, no.
However, considering your circumstances it may be worth calling AT&T and finding out if they will unlock it for you. I have zero experience with that sort of thing, so it may be a crazy suggestion.