Three carriages were derailed in the collision with a lorry transporting coal, a rescue official said on Tuesday.
Passengers were thrown from the train and splinters of metal were strewn on the side of the tracks dozens of metres from the train.
Israeli police said five people were dead at the scene and two others died in hospitals. An additional 191 people were treated for injuries, according to Anat Gil-Zuberi, a police spokeswoman.
A female soldier was in a critical condition, Israel TV reported.
"It's a horrible sight," Dudi Greenwald, a medic at the scene, told Israel Radio.
"One of the railroad cars is upside down, and it's impossible to tell what's inside," he said. "It's the worst accident I've ever seen."
Authorities said the crash, near the town of Revadim, about 40km south of Tel Aviv, appeared to be an accident and there was no reason to suspect it was an intentional attack.
At least 62 ambulances arrived at the scene. Helicopters arrived to help transport the injured, and rescuers climbed over the train seats in their efforts to pull out the survivors.
The crash happened in an isolated
rural area en route from Tel Aviv
The train, carrying 300 to 400 people from Tel Aviv to the southern city of Beersheba, was travelling as fast as 130kph (80mph) when it hit a coal delivery truck at about 6pm (1500 GMT) on a remote section of the track that contained a crossing but no traffic light, said Avi Zohar, a Magen David Adom spokesman.
The massive truck weighed about 40 tons, he said.
"It took about 15 to 20 minutes for rescue services to arrive. We felt really helpless. All we could see around us was fields. We had no idea where we were," Daphna Arad, a reporter for Army Radio who was on the train, told Israel's Channel Two TV.
"Soldiers took out their bandages and began to treat the injured as much as possible," she said.
"I approached a woman who looked all right but had slipped on the floor, and she said she was pregnant and was very worried about her baby. I looked for an old man who had been sitting next to me and I saw that half his head was coated in blood," she said.