Tamid, Chapter 2, Mishnah 3. Chapter 2 follows the kohanim through the early morning service on the mizbeach: the ashes of the previous day were cleared away, and now the fire for the coming day has to be built. Before any korban can be offered, there must be a burning woodpile waiting for it. So the kohanim would carry wood up to the mizbeach and assemble a large stack, the main fire that would serve for the entire day. Our mishnah asks which kinds of wood were fit for that stack.
The mishnah continues: "Hechelu ma'alin bigzirin" - the kohanim now started carrying split timber up to the mizbeach, "lesader esh hama'aracha" - in order to lay out that great burning pile which would stay alight all day long. Notice how unspecific the word for logs is: on its own it would leave the impression that timber of any sort could be piled up there. The mishnah therefore pauses to identify precisely which trees supplied that wood.
Are all woods valid?
"Vechi kol ha'etzim keshairim lama'aracha?" Is every type of wood really fit to be placed on the woodpile? The answer: "Hein, kol ha'etzim keshairim lama'aracha, chutz mishel zayit veshel gefen." Yes, all woods are valid, with two exceptions: the wood of the olive tree and the wood of the grapevine.
Why were these two singled out? Because they were too valuable to Eretz Yisrael to be turned into kindling. The supply of oil in Yerushalayim and throughout the land depended on the olive trees, and the vine had its own importance. Chopping such trees down for firewood was something the Torah's service would not encourage, so they were kept off the mizbeach.
What they actually used
"Aval be'elu regilin." Although virtually every kind of timber was strictly speaking permitted, in actual practice the kohanim habitually turned to three particular types: "bemurbiyot shel te'einah," wood cut from the boughs of a fig that had stopped bearing fruit; "veshel egoz," walnut wood; "veshel eitz shamen," wood of the oil tree.
These three burned best of all, giving a strong and steady fire, and so they became the usual choice for the ma'aracha on top of the mizbeach.