I'm utterly confused.
Here is what I did before I saw your last reply: I created RTF file (in Hebrew) and used the Hamster converter (based on Calibre engine) to convert it to ePub (since at the time I couldn't use Calibre to convert files, which you helped solving the problem). Later I added the new ePub to Calibre and was able to read the file fine. Only problem was when I sent it to my Android cellphone the reader (Cool Reader) changed its direction and shows the file LTR instead of RTL (as mentioned before, Calibre showed it right - RTL).
Now you asked me if I changed the language under the editor before I sent it to my cellphone. So I tried to take the RTF file and converted it with Calibre. Before I did it I checked the language (Edit-metadata button, next to Convert Books) and I tried once with Hebrew, once with English and once I left it blank. At all times Calibre created a Gibrish file, no matter what option I used.
I repeated the steps maybe 5 times (for each option) to no avail. All I got was Gibrish. At that point I when I used Hamster (which doesn't give option to choose a language) I got the same Gibrish file.
In short, not only I can't read it on my cellphone but now I can't even create ePub file which I'd like to read on my laptop, if nothing else.
By the way, I closed Calibre a few times in hope to clean its memory and I also rebooted the laptop. It didn't matter.
I'm sure there is a solution to the problem, and it's mind-boggling that I can't even repeat what I did before with Hamster.