the reason that many tech events in Israel are in English, is not because of it's serving as a "lingua-franca" of our diverse population, but because almost always we have foreign guests or foreign speakers. It's enough to have one high-profile foreigner in the audience, so the entire event will be in English. The small meetups with only Israeli attendants are held in Hebrew. Even if the lectures or talk are in Hebrew, slides most likely will be in English. Also I would not call Jewish immigrants from North America - "expats". Thought there is a big Anglo-Saxon Jewish immigrant community (US,Canada,UK,SA,Australia,NZ).
I'm from Israel (temporary relocated to Europe), but thinking about moving to SF Bay Area for number of reasons. I contacted by our local VCs once in a while, but still it's not the same scale as in the Valley. Also my product based on Erlang/OTP with virtually no experienced people in Israel in Erlang or functional languages at all. The last reason, I work in Semiconductors industry and it's only logical to move to Silicon Valley ;)
Regarding moving to one of European countries: I would be careful, if you planning to hire people there. Most of the countries has strict labor codes, limiting number of hours employees can work and large vacations. So it might be not a good fit for startup. One of the reasons, Intel Larabee project is failed, because large chunk of the project was assigned to Intel Germany ;) VC frequently use word "hungry". Like: "I will fund him, if he is hungry enough". I think for your startup you need to choose a place were people are hungry. Hungry for success, hungry for money, etc. Unfortunately, Continental Europe is not such a place ;)
I think the hunger for risk & success is a good point, and perhaps the main characteristic of Tel Aviv, from business to art to nightlife. Though it takes a certain kind of person, especially if you grew up in much safer Europe/North America.
Good luck with your startup! Will be happy to buy you a beer if you pass by NYC, en route to SF :)