The original cost I stated was for a standard oil pipeline, however, one might need significantly more capacity if transporting water, so I estimated a factor of 25
I do not know much about these things, but it seems to me that desalination would be the way to go in this case, and, correct me if I'm wrong, for fire fighting purposes, salt water could still be used.
Desalination is a tried and tested way of getting water in Israel, and other countries buy it from them because it's the only way for them. I think desalination would be a safer bet.