SEE MATCH PHOTOS
A lacklustre match in Jerusalem came to life in the second half when Israel's Nir Biton fired a long-range strike against the crossbar, but Luzon's men got the crowd at the Teddy Stadium on their feet 10 minutes from time when Kriaf fired home a spectacular curler into the bottom corner.
The victory ensured that Luzon went out on a positive note as steps down from the Israel role to take charge at Standard Liege.
Luzon commented: "England is a national team with top-quality players and a lot of talent, but Israel are united, organised and because of that reason we can beat them.
"It is a fantastic result for us. We are very proud of the level we played at.
"I am very satisfied about our quality, very proud of my players. It's fantastic.
"If we had beaten Norway, we would be in the semi-final but we are not disappointed. I am very proud of my players."
England manager Stuart Pearce said: "Credit to the Israelis tonight, they deserved to beat us. Our performance was really poor, with the exception of Andre Wisdom.
"We've not performed in this tournament that's for sure, there might be a multitude of reasons for that. I have to take it on the chin and obviously the players do as well."
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Israel: Kleyman, Davidadza, Vahaba, Verta, Ben Harush, Zaguri, Biton, Sallilach (sub: Azam 87), Kriaf, Dabbur (sub: Altman 55), Turgeman (sub: Baroch 63)
Goal: Kriaf 80
England: Steele, Clyne, Wisdom, Lees, Rose, Challobah (sub: Sordell 78), McEachran (sub: Redmond 71), Ince (sub: Henderson 46), Shelvey, Zaha, Wickham
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MATCH STATS
Israel:
Shots: 8
On target: 2
Off target: 6
Corners: 4
Fouls: 11
Cards: 0
England
Shots: 13
On target: 4
Off target: 9
Corners: 4
Fouls: 5
Cards: 0
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GROUP A FINAL STANDINGS
1. Italy Pl. 3, Pts. 7
2. Norway Pl. 3, Pts. 5
3. Israel Pl. 3, Pts. 4
4. England Pl. 3, Pts. 0
Results:
Israel 2 Norway 2
Italy 1 England 0
Israel 0 Italy 4
Norway 3 England 1
Israel 1 England 0
Italy 1 Norway 1