Every year, people get confused over how Israel are "allowed" to enter the Eurovision Song Contest. Israel has appeared in the Eurovision' since 1973 but it is neither a member of the European Union nor the European continent; this is common misinterpretation of what the "Eurovision" is. The European Broadcasting Union (parent of Eurovision) has little to do with Europe, except from a historic point of view regarding the countries it was originally formed in. It is in fact a worldwide broadcasting union, encompassing associations with radio/television companies from North & South America, Africa, Asia, Australia... That's why (as you can see in the screen capture above) the Eurovision was involved in coverage of the NATO summit in Chicago recently.
You won't see a song from the USA in the Eurovision Song Contest anytime soon though, because "associated members" of the EBU aren't allowed get involved with Eurovision activities. Only direct members of the EBU can appear in the Eurovision Song Contest. The Israel Broadcasting Authority is a member of the EBU, and that's why they can appear in the song contest. If they so wanted, North African members of the EBU, such as Morroco, Algeria, Egypt... could enter a song, also.
In summation: The Eurovision has nothing to do with Europe. More info [wiki] [ebu.ch]