Place 3 cups of the flour in a large mixing bowl, making a well in the middle.
Dissolve the yeast mixed with the 2 tablespoons of the sugar in the warm water.
Pour yeast mixture into the well and add 1 cup of the sugar and the salt. Mix together thoroughly.
Melt 1/2 cup of the butter in the milk, remove it from the heat, and stir in the oil. Add the butter mixture to the flour, a little at a time, alternating with the eggs.
Beat in another 2 or 3 cups of flour (or more if needed) until mixture is not sticky.
On a lightly floured surface, knead the dough for about 10 minutes, or until smooth.
Lightly oil a large bowl, and roll the ball of dough around until all sides are covered with a little oil. Place a kitchen towel over the bowl and let the dough rise in a warm place until it has doubled in size, about 1 hour. Punch the dough down and place on the counter or a pastry board. Cover the dough and let it rest for 10 minutes.
Divide the dough into 4 parts and roll each part out into a rectangle about 12 inches long by 8 inches wide and 1/8-inch thick. Melt the remaining 1/4 cup butter. Brush rectangles with melted butter and sprinkle them with the 1/2 cup sugar mixed with the cinnamon, nuts, raisins, and chocolate chips, if desired.
Roll each rectangle up the long way (like a jelly roll) and place in a greased Bundt or 10 or 12-inch angel food cake pan. Cover with a towel and let dough rise again until doubled in size, 30 to 60 minutes.
Preheat oven to 325°F.
Brush the top of the babka with the egg wash and bake for 1 hour. Remove from the oven and cool on a wire rack.
*The egg mixture gives the babka a crispy crust. For a softer crust use melted butter instead of the egg mixture.
(c) 2002, Reprinted with permission. Sephardic Israeli Cuisine and other Hippocrene cookbooks may be purchased on Amazon.com or at www.hippocrenebooks.com.
Sheilah Kaufman is the food editor of Jewish Women International's (JWI) website www.jwmag.org and a contributing food editor for The Town Courier, and contributing food writer to Vegetarian Times Magazine and The Washington Post.