Telefon - טֵלֵפוֹן
Pronunciation: Te·le·fon
Literal translation: Telephone
There a quite a few words in the Hebrew dictionary that are transliterations of English words. Another great example is television or televisia in Hebrew.
The official Hebrew word for telephone is שח רחוק.
* Don't use this while talking to Israelis they probably won't know what you are talking about.