History of the Jews
Tel Kabri, a Canaanite palace ca. 1600 BC
By the end of the Stone Age, the people who would eventually become known as the Hebrews, and then the Jews, were mostly settled down in villages, farming, though some of them may have been nomadic shepherds like Abraham and Isaac in the Bible.
During the Bronze Age, the people living in Israel, like their neighbors in Mesopotamia and Egypt, began to have kings and cities. By about 2000 BC, the kings lived in big palaces with thick stone walls, and had slaves who cooked for them and took care of their huge wine cellars. The kings hired Minoan artists to come from Crete and decorate the walls of their palaces (or maybe they hired local artists to copy Minoan work).
As the Bible's stories about Joseph and Moses suggest, these Bronze Age people traveled back and forth to Egypt a lot, both as traders and to find work. Some Hebrews were working for the Egyptians as turquoise miners at Serabit in the Sinai Desert about 1800 BC when they invented the alphabet.
Around 1500 BC, the Egyptian New Kingdom pharaohs conquered most of the Mediterranean coast as far as northern Lebanon and Syria. Like their Phoenician neighbors, the people of Israel lived under the control of the Pharaohs, probably paying tribute every year. The relative peace and safety brought by the Egyptian empire made everybody richer, though their kings resented being conquered. But around 1200 BC, the Egyptian Empire collapsed, and the Jews found themselves independent again.
Learn by doing: how does the story of Joseph match up with the palace at Tel Kabri?
The Kingdoms of Israel and Judah
Bible Lands (Eyewitness guides) by Jonathan N Tubb (1991). With the British Museum - accurate and fair.
Ancient Israelites and Their Neighbors: An Activity Guide, by Marian Broida and Scott Noegel (2003). Activities covering Philistines and Phoenicians as well as Israelites. The book tends to mix fact and story, not making it clear what we know from archaeology and history, and what comes from the Bible.
Archaeology of the Land of the Bible: 10,000-586 B.C.E., by Amihai Mazar (1992).
Ancient Near Eastern History and Culture, by William H. Stiebing (2002). Expensive, and hard to read, but it's a good up to date account.