Hollande, who is flatlining in opinion polls at home, will also use his three-day visit to try to boost trade with the Jewish state, which stood at 2.3 billion euros ($3 billion) in 2011.
He is accompanied by the heads of Alstom, Arianespace and Vinci as well as French foreign minister Laurent Fabius, a key participant in talks on curbing Iran's nuclear programme which ended in deadlock last weekend.
On Sunday he will meet President Shimon Peres and Prime Minister Benjamin Netanyahu, who has described the French president as "a close friend of the state of Israel".
Netanyahu and Peres have both urged France, which took a tougher line than its Western partners in last weekend's negotiations with Iran, to maintain its firm stance at the next round of talks which open on November 20.
"We are convinced that if Iran manufactures its bomb, all the countries of the Middle East will want to follow suit," the Israeli president told French weekly Le Journal du Dimanche.
Israel and Western powers suspect the Islamic republic's uranium enrichment programme is part of a covert drive to acquire a nuclear weapons capability, an allegation Tehran vehemently denies.
The P5+1 group negotiating with Tehran is made up of the five permanent members of the UN security council -- Britain, China, France, Russia and the United States -- plus Germany.
Netanyahu will fly to Moscow on Wednesday to raise the issue with Russian President Vladimir Putin.
Hollande's office said although France's "tactical approach" on Iran was different from Israel's more bellicose stance, both seek to prevent Tehran from developing a nuclear weapon.
Ovadia Sofer, a former Israeli ambassador to Paris, says France is not a disinterested observer in the Middle East, recalling it held the League of Nations mandate to rule Syria and Lebanon following World War I.
"France identifies with Israel on the issue of Iran. France sees itself as a Mediterranean power, as opposed to the United States which is a distant Atlantic power," he told public radio.
"France had the mandate for Syria and Lebanon, and to this day French policy is based on a basic and deep-rooted interest in those countries, and Iran jeopardises those interests."
Iran backs Syrian President Bashar al-Assad's regime and the Lebanese Shiite movement Hezbollah fighting for him against opposition forces.
Sofer said France had close links with Sunni Muslim Gulf Arab counties, who are growing increasingly nervous at the prospect of a nuclear Shiite Iran on their doorstep.
"France has extensive interests in the Arabian Peninsula," Sofer said. "Technology, railways, construction."
On Monday Hollande goes to the West Bank city of Ramallah for discussions with Palestinian president Mahmud Abbas.
French sources said he would encourage both sides to make the necessary compromises to overcome obstacles to US-brokered peace talks revived in July after a nearly three-year hiatus.
Hollande, accompanied by half a dozen of his ministers, will argue for a two-state solution to the Israeli-Palestinian conflict, with security guarantees for Israel to exist alongside a viable Palestinian state.
He is expected to criticise Israeli settlement construction in the occupied West Bank and in annexed east Jerusalem, areas the Palestinians have demanded as part of their future state.
He will also visit the grave of Palestinian leader Yasser Arafat, who died in 2004 in a French hospital and who Swiss scientists recently said may have been poisoned with polonium.
The Islamist Hamas movement ruling Gaza condemned Hollande's visit, with senior official Salah al-Bardawil saying it "supports Israel and is likely to ignore Palestinian rights".
The French leader will also address Israel's parliament, the Knesset, on Monday.
On Tuesday he will visit the graves of four victims of Al-Qaeda-linked gunman Mohamed Merah, who went on a shooting spree in and around the southern French city of Toulouse in March 2012, killing seven people.
He will also lay a wreath at the grave of Theodor Herzl, the founder of modern political Zionism, and visit the resting place of slain prime minister Yitzhak Rabin and the Yad Vashem Holocaust memorial.
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