UTF-encoded keywords in links

Embedding national keywords in links

[Morgenhund]

I tried to search around for this topic, but nothing popped up.

It is known, that having URL on your site like www.blah-blah.com/keyword1/keyword2.html improves positions in SE by keywords1, keyword2.

Now, the question: why if my keyword includes some national-specific symbols, like 'Latin small letter with caron' (html-entitiy č).

Has somebody thied to include such words in URL's, for example, utf-8'ed and then urlencoded? Any encouraging results?