My wife and I are now negotiating over the phone about the possibility of her coming back to Israel with the children. I think this is because I filed for their return under the Convention and she is worried that she may be in trouble with the police. Is there any danger of negotiating independently of my lawyer, when I have phone contact with the children?

Yes, she could be trying to get you to 'agree' without realizing it into the children remaining overseas. Once you agree (after the act) you cannot take it back. You may not even realize you are agreeing, and she may try and record the phone conversation and use it in evidence against you. Beware! Any agreement should be negotiated through your lawyers and authorized in court so that it is legally valid and enforceable. 'Self-help' agreements can rebound and basically provide the abductor with a defence.
Mediation & Agreement