Having just failed to win the nomination last year, she will sing a song called "Diva", chosen over 14 other songs by a committee nominated by the Israeli Broadcasting Authority.
Dana International, born Yaron Cohen in Tel Aviv some 25 years ago, comes from a a traditional, working-class Yemenite-Jewish background and sings in Arabic as well as in Hebrew, French and English. Avoiding conscription into the army as an open homosexual when a teenager, Dana had a sex-change operation in London in 1993.
All this is unusual in Israel where musical culture is often derivative or old-fashioned, symbolised by the fact that the Eurovision song contest is still taken seriously.
"People in Israel don't know what drag is, they don't know how to appreciate it - it is a very primitive country sometimes," she told the Jerusalem Post.
The situation is perplexing for ultra-Orthodox rabbis who denounce ordinary female performers and now find Israel represented by a transsexual. One rabbi confused the issue further by saying that men could attend her live performances - so long as they knew Dana was really a man. She says she has faced little harassment, though there are parts of Jerusalem an Tel Aviv where a woman with bare arms will be spat at.
Voted female singer of the year by listeners to one Israeli radio station, Dana's career began seven years ago after she was discovered working in a show in Tel Aviv.
Some Israeli commentators see her success as a gimmick. One record reviewer describes Dana's work as "pseudo-provocative garbage". Others say that a gimmick could not have sustained her career for so long.
Danny Peled, manager of Army Radio's music department, was quoted as saying: "The kids don't really care if she is a boy or a girl - only the adults seem hung up on that. There is a real thirst for dance music among young people in Israel, in large part because they are now exposed to it on MTV and the like. The dance genre is just developing in Israel and Dana has made a huge impact on it."
Most of her songs are in Hebrew. However, as a Yemenite, she says: "I like to sing in Arabic. I like the language. I like the music. I like the instruments." Her manager claims that 500,000 cassettes of her music have been sold in Cairo alone.