What type of yeast are you using? Different yeasts rise differently, and are also affected by the atmosphere.
I actually find that my Challah comes out much better here than it did in the US. I do put an aluminum pan with water on the floor of the oven while my Challah bakes — the moisture helps the Challah rise more evenly, particularly as the atmosphere here has been very dry (unfortunately).
As far as making a smaller amount goes, as long as you keep the proportions that usually shouldn’t make a difference in the outcome. However, keep in mind the Mitzva of taking Challah in Eretz Yisroel is a mitzva d’oraisa (in chutz l’aretz it is d’rabanan) — maybe it is worth making the full recipe so you can take Challah here with a bracha — a big zchus!
If your recipe still is not working out, you can try mine. This is a very sweet almost “cake” challah — if you like it more bread like you can put in a bit less sugar and oil, and one less egg.
Dissolve 4 oz. fresh yeast (or 4 Tbsp. condensed yeast or 7 packets dry yeast) in a mixture of 1 cup warm water and 1 Tbsp. sugar. Set aside to bubble.
Remaining Ingredients:
2 kilo plus 2 to 3 cups flour (in the US I used 5 pounds, but this is the best equivalent that has worked)
2 cups sugar
2 Tbsp. salt
5 eggs
1 1/4 cup oil
2 3/4 cup warm water
Mix about half the flour with the sugar and salt. Add the eggs, oil, warm water, and yeast mixture and mix well. Add remaining flour and knead well. You may need to add a little extra flour — add enough so that the dough is only slightly sticky. If you are using a mixer, add enough so the dough is not sticking to the sides of the bowl while it is mixing. Let rise in a warm place for 1 1/2 hours, and then punch down and knead again. Let rise another 1/2 hour to 45 minutes, punch down and shape. (This makes 6 large or 8 smallish challahs). Preheat oven to 180 degrees Celsius (350 Fahrenheit). Allow the Challahs to rise in their pans for another 45 minutes and then coat with egg. Bake for 35 minutes. (As mentioned above I put a tray of water at the bottom of the oven.) I switch the Challahs around in the oven to the opposite shelf after 20 minutes so they bake more evenly.
Good luck!