Local search algorithms operate by examining the current node and its neighbors. They are suitable for problems where the solution is the goal state itself rather than the path to get there. Hill-climbing and simulated annealing are examples of local search algorithms. Hill-climbing continuously moves to higher value neighbors until a local peak is reached. Simulated annealing also examines random moves and can accept moves to worse states based on probability. Both aim to find an optimal or near-optimal solution but can get stuck in local optima.