"We have received reports from the field that the workers have begun to respond to the strike. In the event of developments in the labour court, we will receive the appropriate instructions," Jihad Akel, a Histadrut official, told Israel Radio.
The union says that thousands of municipal workers that it represents have not been paid for months. The government says local authorities are to blame for not adhering to efficiency programmes agreed to in 2004 so they could pay the salaries.
The union originally planned to start the strike at 6am (0400 GMT) but delayed it to allow more time for negotiations with the government. The two sides had talked through the night.
An adviser to Ehud Olmert, the Israeli prime minister, began negotiations with Ofer Eini, Histadrut's chairman, late on Tuesday in an attempt to avert the strike.
The strike could potentially disrupt arrivals for a Euro 2008 football tournament qualification match between Israel and England on Saturday.
Some 4,000 England fans were expected to fly in for the game, which would bring in revenue to a tourist industry damaged by mass cancellations during Israel's war against Hezbollah in Lebanon last year.
Eini has promised that union workers would let the England team's plane land on Thursday but it was not clear whether planes bringing fans would also be allowed in.