Found this great post on Geo Targeting by Rand at SEOmoz. This issue is often a major factor with Israeli companies who target foreign markets.
Some of the contributing factors that influence Search Engines in geo targeting results:

* Language
* Domain Extension (e.g. .com.au, .co.uk, .fr, .de, .nl)
* Host IP Address (you can try using the IP Location Lookup Tool for that data)
* Registration with Local Search Engines (Here’s Google’s, Yahoo!’s & Live/MSN’s)
* Link Sources (if lots of links point to you from domains in a particular country, that data may be taken into account)
* On-page address data (placing your physical business address in the HTML on the page)

[youtube=http://www.youtube.com/watch?v=UTbkjTmZMMs]