Israeli's allegorical film fantasy is a bold vision of a one-state solution

In one of the more daring, not to say crazily surreal, moments in the taboo-breaking Forgiveness, a troop of uniformed Israeli soldiers prance in an uninhibited Sufi-like dance to Arab music. The Israeli writer and artist Udi Aloni's first feature film opened here this week, little more than a month after the end of the Lebanon war.

If nothing else, the sequence, one of Aloni's personal favourites from the film, does justice to his vision in which, among other things, Arabs and Jews will finally and enthusiastically embrace each others' cultures. It is a vision underpinned by the to some subversive redo he holds, as a Jew, that "waking up and there not being any Palestinians would be my worst nightmare. It's something so beautiful about the two nations living there. Any homogenic culture seems hell to me".

That the sequence works is a tribute to his choice of the leading Israeli choreographer Ohad Naharin to stage it. Similarly, while the US-Israeli production is relatively low-budget, the artists involved include some of the finest Israeli and Palestinian actors. Which may be just as well, for the film is one of the most challenging, as well as memorable, to hit Israeli screens in many years.

Having won acclaim at the Berlin Festival, it shows at the Copenhagen Festival this weekend.

David, a New York Jew, son of a holocaust survivor who is a successful musician, travels to Israel, joins the Army, unintentionally, though under orders to "shoot anything that moves", he kills a young Palestinian girl while on an operation in the West Bank.

He is haunted by the experience to the point of catatonic psychosis and fetches up in a psychiatric hospital, populated by shattered Holocaust victims, built on the site of Deir Yassin, the village where the Irgun and the Stern gang massacred more than 100 Palestinians during the 1948 War of Independence.

The young soldier is eventually given an anti-trauma drug designed to erase the memory of the act which has disabled him, returns to New York, has an affair with a beautiful Palestinian girl, Lila, whose daughter bears an uncanny resemblance to the one he shot before his sanity starts to unravel.

Aloni, 47, a New York-based writer and artist whose mother is Shulamit Aloni, long a leading peace activist and leader of the Israeli left, acknowledges debts to Alfred Hitchcock and Clint Eastwood among others. His film can also be read as an appeal to Aloni's fellow Israelis to confront and reappraise their own past, including what for Palestinians was the nakba or disaster of 1948, as a necessary first step towards reconciliation with the Palestinians.

Part-realistic, but much more an allegorical fantasy which explores what Aloni calls "the collective unconscious of a community that searches for its identity through its relation with the other Forgiveness is stirring controversy.

For Hannah Brown, the critic of the sharply right-leaning Jerusalem Post, the film's "whiny, bleeding-heart sensibility" help to make it perhaps the "most pretentious and annoying movie ever made".

But for Abner Shabit, of the Tel Aviv listings magazine, Ahbar Ha'ir, "The mixture of great acting, [and] spectacular aesthetics ... will convince the most doubting viewer a trip to the collective unconscious of the Jewish people is an interesting experience."

Whatever the defects of a film arguably overladen with literary allusion and symbolism - and they are the more easily overlooked, thanks to commanding performances by Itay Tiran as David, Clara Khoury as his girlfriend Lila, Makram J Khoury as the psychiatrist and Moni Mashanov as the mad-sane Holocaust survivor who helps David to confrontation with his demons - "whiny" seems well wide of the mark to describe Aloni.

He is an engaging, intellectually voracious bear of a man who shows every sign of as profound a sympathy with his fellow Jews as with the Palestinians. His friend, the philosopher Slavoj Zizek, says the film neither uses the Holocaust to justify "Israeli activity in the occupied zones" nor resorts to the "ridiculously false" and "latently anti-Semitic" equation of "what Nazis were doing to the Jews, the Jews are now doing to Palestinians".

Aloni cites Primo Levi as his "hero" for going back into the "trauma zone" in his chronicles of Auschwitz and recovering the "humanity" which Aloni sees as having died in the Holocaust. He says that, as artist, he wants to keep alive the vision of a "one-state solution" in which Palestinians and Israelis would co-exist as equal citizens, but says he would also strongly support a two-state settlement if it happened.

But the film is less a political tract than an appeal for each people to share the suffering of the other. "We have not only to acknowledge [the Palestinian displacement in] 1948," he says. "We have to feel it."

At one point the psychiatrist who administers the memory- suppressing drug to David reflects:"Can we really erase the memory of his trauma and yet keep the memory he inherited from his father, whose family was murdered for no other reason than for being Jews?"

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