Can not insert local language data into db

Hi,
I installed phpbb forum application on commercial server (brinkster.com)
with mySql as database.
You can see the application here:
http://www.adeo.co.il/forum/

When i try to insert English characters everythink works fine
but when i try to insert Hebrew (my local language) characters
weird signs appear (you can see in the link above).
When i look inside the Db the hebrew data is also seen as weird characters.

What might cause this?
doesn't php and mySql use unicode?
How can i fix this?