I was wondering if anyone knows of any good shops that carry local arts and crafts by local artists in Madrid and/or Toledo. I am really interested in decorative ceramic plates/bowls and Jewish 'mezzuzzahs' and 'menorrahs' (for the parents). Thanks for the help.

Toledo is full of shops selling "craft" stuff for tourists (does anybody actually buy those swords?!). A lot of it seems to be "mass produced" in factories. On our last trip we found a more interesting ceramics "taller" (workshop) run by a couple of guys. We had a chat with one while he was working and he explained that they basically worked in 3 styles, one of which was Jewish as I remember. Problem is I can't remeber where it was, but I think it was somewhere between between the Plaza del Ayuntamiento and the Juderia. There was just a door with a sign "Ceramica" outside it.

People definitly buy the swords. It was a little tricky to get the three and a half foot sword that I bought home. as long as you get them in your luggage there is no problem. the class I went with ended up coming home with 3 long swords and about twenty asorted knives, katanas and daggers. Our teachers were a little stressed :-) but no one got hurt (altuough I did end up wacking myself in the shin pretty hard that night in my hotel room). I personaly thought it was awsome wandering through Toledo because of all the craft shops. you will have no trouble at all finding anything you are looking for.

I have two favorite shops where I pick up gifts to send home from time to time. One carries the ceramics from Talavera la Reina and is a bit pricier than going directly there but if you don't have time, it's the nicest store I've found in Madrid. It's on Claudio Coello in front of the Melia Los Galgos (corner of Diego de Leon). It's owned by a charming man who will talk your ear off if you speak Spanish. The other is in the Plaza Mayor on the corner which leads to the Calle Cuchilleros. It's in the heart of "tourist ville" but by far has the nicest local wares I've found. They have artesanis made by local artists including ceramics and jewelry. Upstairs you will find a display of a temporary featured artist and his or her collection.

In Toledo I found some shops which are selling very very beautiful ceramics. There are a few of them on the narrow streets, it's a special find of ceramics manufactured there, a very beautiful one. There are plates and glasses, but first of all I loved some statues that are also candle-holders (sorry, I don't know the English word for this); they are symbolic figurines, very very interesting ones, but also very expensive (around 30.000pst each). I didn't have so much money, but I definitely recommend them, there is a special kind of ceramics in Toledo obviously hand painted.
You can find swords and knives almost anywhere in souvenir shops, but try not to buy them near museums or from Toledo cause they are more expensive there.