1. Once you agree to allow secular culture in Eretz Yisrael (we had the option to ally with the Muslims against the zionists, and we did not do so), you are stuck. “Eurovision” is no more a “hillul ha-Shem” than the rest of zionist culture. It doesn’t make any sense to object to “Eurovision” unless yuou are objecting to the rest of secular entertaininment (which frequently involves undress male and female performers, as that is the nature of their culture). Indeed, since almost all performers in “Eurovision” are goyim, it is much less of a Hillul ha-Shem then the typical secular entertainment in Eretz Yisrael.
2. If the zionists get “Eurovision” in Jerusalem it would be a major accomplishment for them since all the European countries do not consider any part of Jerusalem to be part of Israel. Don’t be surprised if it gets moved to the internationally recognized capital of Israel: Tel Aviv.