Hebrew links in Panel panes shows only site's domain without the given path/alias

Hebrew aliases of links works fine in regular nodes but when the same links situated in Panel nodes they link only to the sites' Domain while their path or alias is being ignored - the URL's alias won't appear in the page source (ctrl+u) even though it appears in the textfield or node edit screen. wired eh?

Facts:

1. It happens only in Hebrew aliases - English aliases work fine.
2. I've replicated this issue at least 4 times now, each time with a different Hebrew link.
3. It happens with or without CKeditor. I even tried to open A new Text-format in drupal that contained no basic filters, allowed full HTML, and wasn't integrated in any shape or form with CKeditor - Even then, there wasn't any change with the links.
4. I thought it's an XSS (cross site scripting) filtering issue, but it is not likely due to the fact that in regular nodes the very same Hebrew links works just fine.

Given these facts above, I conclude this problem is a bug with the Panels module itself.

This is one of the links I tried to post (changed domain name to avoid advertising here):

http://yoursitesname.com/%D7%99%D7%95%D7%A2%D7%A5-%D7%A9%D7%99%D7%95%D7%95%D7%A7-%D7%9C%D7%94%D7%92%D7%91%D7%A8%D7%AA-%D7%94%D7%A0%D7%95%D7%9B%D7%97%D7%95%D7%AA-%D7%94%D7%90%D7%99%D7%A0%D7%98%D7%A8%D7%A0%D7%98%D7%99%D7%AA-%D7%95%D7%94%D7%9E%D7%9B%D7%99%D7%A8%D7%95%D7%AA-%D7%A9%D7%9C-%D7%A2%D7%A1%D7%A7%D7%9A

This problem can be reproduced by installing Drupal 7.36, ctols 1.7.7, panels 3.5.7 (and all other required modules up date as to 1.4.2015), and then configuring the site's default language to Hebrew. When you will try to create such internal links (in Hebrew) in Panel panes as mentioned above, you should encounter this problem - alas there is an hidden culprit...

Any ideas how to fix this problem (maybe in the Panels code)? Thanks for your help!