On April 4, 2011, Juliano Mer-Khamis turned up unexpectedly at the Freedom theatre in Jenin and went inside to talk to his students and staff. Usually he would call ahead whenever he planned a return to Jenin, but this time, driving up from Ramallah where he had just premiered a new production of a play by Eugene Ionesco, he gave no advance warning.

An actor and director who had forged a successful film and stage career in Israel, Mer-Khamis moved to Jenin in 2006 to set up the Freedom theatre in the city's sprawling refugee camp, one of the most deprived areas in the West Bank. In his five years as artistic director, he had created a hub of cultural activity in Jenin and, by touring home-grown productions abroad, had given young people in the camp a sense that they had a voice in the world.

After nearly a fortnight in Ramallah, Mer-Khamis had a lot to catch up with at the theatre. A new class was opening at the acting school, and there were perennial financial problems to contend with, but first he wanted to see his family. His Finnish wife, Jenny Nyman, was pregnant with twins and due to give birth at any moment. He spent a few minutes chatting and joking with the acting-school co-ordinator, Rawand Arqawi. Then he picked up his one-year-old son, Jay, who was there with a babysitter, and set off home in his little red Citron.

With Jay in his lap and the babysitter beside him, he drove out of the theatre's cramped courtyard and turned right. A hundred metres down the street, a man stepped out of an alleyway shouting "Stop! Stop!". His face was masked, according to the babysitter, and he had a gun — but in spite of this, Mer-Khamis stopped the car.

At first, he thought it was a joke — Jenin humour is notoriously rough. Then, realising the man was going to shoot, he swung Jay out of range. In the same moment, the man opened fire and shot Mer-Khamis seven times before retreating into the refugee camp's maze of narrow streets.

Back at the theatre, Arqawi heard the commotion and ran out to find Mer-Khamis slumped inside the car. An ambulance turned up a few minutes later. Arqawi got in with Mer-Khamis, but before they could get him to a hospital, the 52-year-old was dead, leaving Arqawi and his devastated colleagues to wonder who had killed him and why — and whether the theatre he had worked so hard to establish could survive without him.

From the outset, it was clear that the Freedom theatre was a dangerous undertaking, but Mer-Khamis and his co-founders believed that the need for it in Jenin outweighed the risks. When it opened in 2006, there were no other theatres in the area and Jenin's only other cultural centre, a cinema, had been closed for 20 years.

In the heart of the West Bank's impoverished northern region, Jenin feels remote from the administrative capital Ramallah, 60 kilometres to the south.

Creative vent for anger

During the five-year period of instability known as the Second Intifada, when protests against Israel's policies escalated into widespread violence, Jenin camp was a stronghold of armed resistance. For the thousands of children growing up there, violence and its effects have been part of everyday life. When the Freedom theatre opened in 2006, many of the young people who joined believed in armed struggle against the Israeli occupation. Mer-Khamis and his co-founders sought to challenge that belief and provide a creative outlet for anger and trauma.

Under Mer-Khamis, whose forthright political views made him a controversial figure among Israelis and Palestinians alike, the theatre also set out to effect social change and challenge authorities on both sides. Students were encouraged to express the frustrations in drama-therapy sessions, and on stage they tackled such issues as women's rights, religious extremism and local corruption. An adaptation of Animal Farm, first staged in 2009, cast Palestine's political leadership as power-hungry animals who end up no better than their former masters.

In terms of its outward appearance, if nothing else, the Freedom theatre is an unassuming place. The entrance, on one of the main streets running through the refugee camp, is unmarked. The performance spaces and the acting school are housed in a couple of sandstone buildings which began life as railway storage units in the Ottoman era.

When I visited Jenin late last year, there was an air of restlessness about the theatre, as if a central mechanism had stalled and everyone was waiting anxiously for it to start moving again. The main event of the afternoon was not a performance or a rehearsal — it was the arrival of a large group of Swedish theatre practitioners and enthusiasts who were coming to assess the fragile state of Jenin's only theatre.

Jonatan Stanczak, the new managing director and one of Freedom theatre's co-founders, led the group into the reception area for an introductory talk. Sketching out the pre-history of the theatre, Stanczak explained that Mer-Khamis's association with Jenin stretched back long before 2006 in the late 1980s, when his mother, Arna, a Jewish-Israeli activist and social worker, came to live in the refugee camp. "Arna was a woman of Jewish heritage who challenged the Israeli-Zionist agenda from a very early stage," Stanczak said. "She was excluded from her family because she married a Palestinian man [Saliba Khamis] who she met in the early Israeli communist party."

In Jenin, Arna established four educational centres for young people in the camp and later set up a small community theatre on the top floor of a local family house. She named it the Stone Theatre after the stones children from the camp would throw at Israeli army vehicles.

Juliano Mer-Khamis, who had served a term in the Israeli army before becoming an actor, joined his mother in Jenin to run a drama group and direct shows in the tiny theatre space. But he didn't stay there long. Arna died of cancer in 1995, a year after the theatre opened, and her son returned to Israel to resume his acting career.

In 2002, the Stone Theatre was demolished by an Israeli bulldozer and several of the boys from Mer-Khamis's class died in the fighting. However, the memory of the theatre lived on, and a few years later, as the trouble in Jenin was receding, a former student named Zakaria Zubaidi appealed to Mer-Khamis to return and set up a drama project for a new generation of young people even more vulnerable than the last.

In one way or another, everyone involved in the Freedom theatre has been affected by the years of unrest in Jenin. On my night in the refugee camp, I stayed with Kamal Awad, whose family lives in a small house near the theatre. A 23-year-old acting student with leading-man looks, Awad also works as a refuse collector with the United Nations Relief and Works Agency.

While Awad's mother prepared an evening meal of hummus and pickles, his father sat across from us in the front room with his head in his hands, rocking back and forwards and compulsively rubbing his scalp. During the camp invasion in 2002, according to Awad, his father received a blow to the head from an Israeli soldier that left him brain-damaged and unable to speak. The family has been unable to afford proper medical treatment so they do what they can for him at home.

The situation took a heavy emotional toll on Awad. "Before I started working with Juliano in 2006, I was aggressive and ready to fight," he said. But joining the Freedom theatre allowed him to step outside his anger. "Along with acting, I learnt how to be a better human being."

The core of the theatre's work is the use of drama as a form of therapy. In the safety of the rehearsal room, trained practitioners encourage students to share their experiences and work through them in role-plays and other theatrical processes. "The first role-play I did," Awad told me, "was about my father. It helped a lot to work through family problems on stage."

When Stanczak ended his introduction in the reception area, he showed us a video of a drama therapy session. In a dark room, individual students from the theatre acted out their feelings and urges.

"Drama therapy is a safe way to deal with your personal experience, within the art," said Petra Barghouthi, a drama therapy practitioner. "You don't directly face your experience, you deal with it obliquely, indirectly, either by using a story or role-play or movement or sound, or all different techniques of theatre."

Afterwards, Stanczak walked us through the main theatre space to a large blacked-out rehearsal room where a group of students were having an introductory lesson in playback theatre, an improvisational form that uses stories from the audience as material for drama and debate. The class broke up as we arrived and I asked Mahmoud Al Ganem, who had joined the acting school a year and a half ago, what the theatre was doing for him.

"Everyone has problems in life — anger, sadness — and that's what I'm trying to articulate here," he said.

When the theatre first opened in 2006, it had difficulty attracting people to take part in activities such as drama therapy. "Jenin refugee camp is a conservative and traditional community," Barghouthi said. "They still believe that if a person is suffering from psychological difficulties, it's something that is a shame. They don't believe they have to ask for help."

That the theatre was being run by someone from Israel made the challenge even greater. The younger people who didn't remember Arna Mer-Khamis or the Stone Theatre viewed her son with suspicion. "We were wondering, what was this Jewish guy doing here," Awad recalls. "People thought he was a spy."

Attempts were made to burn down the building and members of the theatre were physically attacked. Leaflets denouncing Mer-Khamis were circulated, but his charisma and passion for the project won people over. When children eager to take part were obstructed by their parents, Mer-Khamis would go to their houses and explain why the project was worthwhile.

"My family thought I was crazy for wanting to come here," says Suzanne Wasfi, a filmmaker and photography instructor. "They refused to let me go. But then Juliano came to talk to my family and eventually I was allowed to come." She wasn't the only one. Before Mer-Khamis's death, according to Arqawi, it had got to the point where the classes at the theatre were predominantly female. "We had to go out and look for boys instead," he said.

We should be able to look at ourselves

What is striking about many of the productions devised and staged by the Freedom theatre is that they aren't restricted to anti-Israeli propaganda or representations of Palestinian suffering under occupation. Through his work at the theatre, Mer-Khamis was intent on creating a more nuanced picture of life in the West Bank.

"Actors, painters, musicians [have been] going out to festivals in Europe and showing the occupation in all its forms — the suffering, the economic situation," Mer-Khamis said in 2010. "I think we forgot [to talk about] our own houses, children, wives. Now the youth have decided to say: ‘We go out, discuss the wall and the checkpoints but we go out also with the impression of our own women, with the dictatorship of our society, with tradition and religion'."

Questioning aspects of Palestinian society provoked anger. "Many people didn't like that we criticised our own society," Mer-Khamis said. "But this is the policy of the Freedom theatre. Along with criticising the occupation in all its atrocities, we should also able to look at ourselves."

Before Mer-Khamis's death, the theatre was busier than ever. It had about 100 students and 15 full-time staff, and the audience for its productions at home and abroad was increasing. It received a large amount of international attention and financial support for its size.

The creative engine at the theatre didn't grind to a halt on April 4, 2011 — new work has been produced and undergraduate groups have been touring in Germany and the United States — but it is clear that losing Mer-Khamis has hit the theatre hard. Student numbers are down, according to Arqawi, and many activities are on hold. To make matters worse, the theatre has found itself under investigation by the Israeli security service Shin Bet. In the early morning of July 27, a group of Israeli soldiers broke into the theatre and arrested location manager Adnan Naghnaghiye and the theatre's chairman, Bilal Sa'adi.

Ten days later, acting student Rami Hwayel was arrested at a checkpoint. A second raid on the theatre on August 22 resulted in the arrest of Naghnaghiye's brother Mohammad. Each was accused of taking part in the Mer-Khamis murder, but all were eventually released without charge and are now back at work.

Stanczak sees the break-ins as part of the "systematic harassment" of the theatre by Israeli authorities. Four separate authorities — the Israeli and the Palestinian police, the Israeli army and Shin Bet — have been investigating the case, but as yet Mer-Khamis's murder remains unsolved.

While they await closure, Mer-Khamis's colleagues have been doing their best to carry on without him. There are reasons to be hopeful. In December, a second Freedom-theatre space opened in Jenin city. Multimedia activities and after-school drama groups are opening up again and several new courses, including the one in playback theatre, have been added.

"We have managed to ride through the storm," Stanczak said. Mer-Khamis's "borderless, visionary, crazy way of looking at the world" can never be replaced, he admitted, "but I think some of that craziness and inspiration continues with the people he worked with for more than five years".