This Jerusalem Post article reminds me of the true story of one of the first American-style bagel places in Jerusalem, Beit HaBagel, The Bagel House. It was owned by a friend of ours, and I even worked there for about six months, another story. Today it's owned by others and called Holy Bagel.
Beit HaBagel was always kosher, of course. One of the first things an owner has to do when applying for kashrut certification is to submit the basic menu. He was horrified to find it rejected as traif. The menu was just like all of your standard kosher bagel places in New York, with the addition of bourekas to cater to Israeli tastes and the nearby Moniyot Beit Shemesh taxi drivers.
"What's traif about it?"Well, what's the story? The Mashgiach, kashrut supervisor was Moroccan, and according to the Moroccan psak, Torah opinion, you may mix your meat and fish, but it's forbidden to mix your fish and dairy. Beit HaBagel's owner, David Oberman, had to bring other strictly Torah-observant rabbis to talk to the one who had been assigned to supervise the restaurant-bakery. Eventually, the kashrut supervisor agreed to permit cream cheese and lox to be served and gave it his approval as a strictly kosher restaurant.
"It's forbidden to eat fish and dairy together."
"That's impossible. Bagels with cream cheese and lox are served in all the Orthodox shuls in America!"