As I understand it, the joke is that the Hebrew פ can be read as either pei or fei, and thus can represent either the Пп or Фф of Cyrillic; and similarly, the Hebrew ב (bet or vet) can stand for either Бб or Вв.
By the way, after some Googling, I was able to locate the page of "funny/dirty" Hebrew-Russian misunderstandings, where I had originally seen that "Pidor Yebanov" joke. (Apparently there are quite a few Hebrew words with the syllable -хер-!)
One of the non-dirty examples is a joke about Russian tourists visiting Israel who see a cafe with a large sign that reads:
l0l0l l0l
Quite naturally, they assume that this is binary code and that it's an Internet cafe where they can send emails home. So, they go inside and are surprised to see that there are no computers. They find out that the owner speaks Russian, so they ask, "How does that computer code on your sign translate into normal language?" The guy responds, speaking Russian with a heavy Georgian accent, "Computer code?! What, can't you read Hebrew? It says Vaso and Soso!"
("Vaso" and "Soso" are stereotypical Georgian nicknames, short for "Vasil" and "Bessarion", respectively. And "Vaso and Soso" written in Hebrew indeed looks like binary numbers, especially if you use a san-serif font!)
BTW, I don't speak or read Hebrew at all, and can't even "sound it out" phonetically because I don't know the vowel-pointing -- I only know the basic consonant letters. I taught myself the Hebrew alphabet years ago when I was living in Brooklyn, and I would practice reading the letters on all the synagogues and Hebrew schools as I rode my bicycle to Coney Island and Brighton Beach! But for the most part I didn't understand any of the words.