The dogs are to be supplied by a group of American Jews who call the project "Pups for Peace", the Israeli Interior Minister, Uzi Landau, said.
The dogs would be trained to sniff out explosives and then immobilise any would-be bomber.
Correspondents say that use of dogs in the Middle East is culturally complex because Muslim tradition considers them unclean.
Some Palestinians say the use of sniffer dogs at crossing points in the occupied territories is a deliberate attempt to humiliate them.
Jewish tradition holds that dogs are blessed because they did not bark to alert the Pharaohs to the flight of the Israelites from Egypt.
Mr Landau said the Los Angeles-based group was offering to buy the dogs and have them and their handlers trained in the Golan Heights.
"They identify with us because of the problems which we are currently facing," he told Israel radio.
Death toll
More than 200 Israelis have been killed in suicide bomb attacks in the past two years. The Palestinian attackers usually wear the explosives in a vest.
Mr Landau said the dogs would be trained to smell explosives and then attack the bomber, pinning them down before they can get into a crowd of civilians.
Pups for Peace founder Glenn Yago, 52, told the Associated Press news agency that the goal was to train 1,000 dogs and handlers.
He said that 60 dogs would be deployed to begin with, hopefully rising to at least 200 in a year.
Mr Yago, an economist, would not say how much the project would cost but said his group was financed by donations.
He said the idea had started after the 27 March suicide attack at a Passover celebration in Netanya, in which 29 people had been killed.
Guard dog
He believed that the bombing, at a hotel, would have been an easy one for a dog to have prevented if it had been stationed at the entrance.
The Israeli army and police already use sniffer dogs to detect explosives but Mr Landau said he believed many civilian lives could be saved if dogs were used more widely.
He said the only obstacle to the plan was that the Israeli police are forbidden from receiving donations. But he said the ministry was trying to get around the prohibition.