I have known a handful of Atarahs and Ataras, some of whom were Israeli, and I have always always always heard it pronounced closer to uh-TAR-uh, and never AT-a-ra. From what I know about the Hebrew language AT-a-ra is incorrect. [noted -ed]
@ZoeAliza, the pronunciation with the first syllable stressed is not incorrect. In Hebrew, there is not definite stress, as in European languages. The syllables actually have equal stress, and can change based on context. Of course, English speakers would naturally want to stress the second syllable.