Media reports initially said a section of stadium seating had collapsed at the Lag B'Omer event in Mount Meron in the Galilee.
Over 100 people were injured, many of them critically, as medical staff struggled to evacuate people trapped at the scene at Mount Meron.
After the stampede, police closed access to the area to prevent a crowd from building further, while rescue workers and security forces worked to clear the area and identify the victims.
Medics said 103 people had been injured in what they described as a stampede.
The annual pilgrimage for the feast of Lag BaOmer is staged in Meron around the reputed tomb of Rabbi Shimon Bar Yochai, a second century Talmudic sage.
Almost 40 people were killed and over 100 injured in a stampede that broke out overnight at a Jewish religious gathering attended by tens of thousands of people in northern Israel, according to media reports on Friday.
Videos posted on social media showed chaotic scenes as Ultra-Orthodox men clambered through gaps in sheets of torn corrugated iron to escape the crush, as police and paramedics tried to reach the wounded.
Prime Minister Benjamin Netanyahu called it a "heavy disaster", adding on Twitter: "We are all praying for the wellbeing of the casualties".
"I felt like I was about to die", he said.
Heller told the station "no one had ever dreamed" something like this could happen.
A spokesman for the Magen David Adom, Israel's rescue service, told AFP "there were 38 dead at the scene but there were more at the hospital". "In one moment, we went from a happy event to an vast tragedy", he said.
But officials later said it appeared the casualties had been asphyxiated or trampled in a stampede.
The country has seen cases plummet since launching one of the world's most successful vaccination campaigns late previous year.
Tens of thousands of ultra-Orthodox Jews had gathered at the tomb of the 2nd-century sage Rabbi Shimon Bar Yochai on Friday for annual commemorations that include all-night prayer and dance.
Around 5,000 police had been deployed to secure the event, the country's largest public gathering during the coronavirus pandemic.
Ohana, a close ally of Netanyahu, thanked police for their hard work and dedication "for protecting the well-being and security for the many participants" as he wished the country a happy holiday.