Is Jeremiah 33:18 literal? Does it mean that the Levites will always offer sacrifices. How can this be if we are under the New Covenant? Also in Ezekiel 26:12 is this a prophecy about Alexander or is it about Babylon plundering Tyre? If it is Babylon, how could that be if Nebuchadnezzar got no reward for his campaign?
Both are good questions. On the face of it, we will have to concede that there is an apparent inconsistency between Jeremiah 33:18 and the Christian teaching that the Old Covenant is no longer in force. In fact, we could go back to 33:17 which says that "David will never fail to have a man to sit on the throne of the house of Israel," as well as v. 18, which you refer to, which tells us that the priests who are Levites, will never fail to stand before Him. On the face of it, there is clearly not a descendant of David ruling in Jerusalem as king over a political Israel, which would appear to contradict the promise of God in Jeremiah 33:18. One can argue that there are still Levites in Israel, but they are no longer offering the Levitical sacrifices at the temple in Jerusalem.
First of all, when God says that a covenant is "eternal" to the Jews, this does not mean for an infinite amount of time. The word used for eternal means until the end of that covenant/age. For example, in Matthew 5:17-20 that not a jot or tittle will disappear from the law. However, it says that he fulfilled the Law, which brought in a new and greater Law. From Jesus’ perspective, the fact that he is bringing in a new and better covenant does not negate the old Covenant. It fulfills it. This is made clear in many places in the New Testament. In Hebrews, the covenant given to Moses is called a shadow, of which the New Covenant is the fulfillment–the "reality." (Hebrews 10:1). In the immediate context of Hebrews 10, the Hebrew writer makes it clear that the Mosaic covenant was not sufficient to bring salvation, so God already planned, from the beginning, to give a better covenant.
Second, if we look at the type/antitype relationship between Old and New Testament, we can see that, in fact, spiritual Israel (the church) does indeed have a ruler on the throne over Israel and it does have priests standing and ministering before God. Our king is Jesus. He rules in the real and better tabernacle in heaven. This is the message of Hebrews ch. 8-10. Jesus is the Son of David who will reign for eternity over the church and over the Kingdom of God. The Kingdom also has priests serving before God. 1 Peter 2:4-10 tells us that those who are saved in Christ are a priesthood, making spiritual sacrifices acceptable to God through Jesus Christ. We who are in Christ are a royal priesthood. The physical Levitical priesthood has been replaced by the spiritual priesthood of the New Covenant. So, there is a sense in which there is no longer a physical king dwelling on a physical throne in physical Jerusalem, and there is no longer a physical priesthood, serving in a physical temple. However, God has replaced each of these things by something which is much greater. This is the message of the book of Hebrews, which is shown in more subtle ways throughout both the Old and the New Testament.
There are many prophecies in the Old Testament which point toward the replacement of the Mosaic Covenant with a greater and more spiritual covenant. In fact, this brings me back to Jeremiah 33:14f. In the context, this is a prophecy of a New Covenant which will replace the old one. Jer 33:15 is a prophecy that the "Branch" from David’s line will rule. This is a clear prophecy of Jesus, the Son of David. In this passage, the "David" who will never fail to rule is Jesus. In v. 22 he says that the "Levites" will be like the stars in the sky. Again, we see a prophecy of the New Covenant. I go into much detail regarding the types, prefigures and foreshadows in the Old Testament which are fulfilled in the New Testament in my book From Shadow to Reality. You should pick up a copy of this book, as it will be very helpful in this regard. It is available at www.ipibooks.com
About Ezekiel 26:12, I believe that the fulfillment of this prophecy is complicated. We should be careful to assume that when a prophet of God makes a predictive prophecy, the fulfillment of this prophecy all points toward a single event and a single time. Jesus’ prophecy on Matthew 24 and Luke 21 is a prediction, both of the destruction of Jerusalem in AD 70 and of his second coming. This "double fulfillment" seems to be in play in Ezekiel 26:12. God used both Nebuchadnezzar and Alexander to fulfill his prophecy of judgment on Tyre for its greed, its arrogance and its disdain of Israel. Not long after this prophecy, Nebuchadnezzar did indeed come against Tyre. The old city was destroyed at that time. However, Tyre was rebuilt, with its fortification on an island off the mainland. This New Tyre was completely destroyed and scraped into the sea by Alexander. It was in 334 BC that the prophecy was completed and Tyre was destroyed forever as a naval and trading power. It was at the time of Alexander that Tyre became "a desolate city, like cities no longer inhabited." (Ezek 26:19) I am not sure why you say that Nebuchadnezzar got no reward for his campaign. I am sure that he got much plunder from his attack on Tyre. You might want to use the old classic Evidence that Demands a Verdict by Josh McDowell for more information on Tyre and the fulfillment of Ezekiel’s prophecy.