Since as far as I know, Kindle has no trouble with even most exotic characters as it is Unicode based, so I would think hebrew would be supported as well. The trouble most probably lies in the encoding used (and most probably it is caused by the conversion). I had pretty much the same problem with encoding of some Czech books I downloaded - some came out right directly after epub -> mobi conversion while most needed some tweaking of the conversion settings in Calibre.
Since I have no knowledge of possible hebrew encodings, I could not help you should direct your attention in that direction.
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