This film image released by Adopt Films shows Adam Bakri, left, and Leem Lubany in a scene from the film "Omar." The film was nominated for an Academy Award for best foreign picture on Thursday, Jan. 16, 2014. The 86th Academy Awards will be held on March 2. (AP Photo/Adopt Films) Image Credit: AP

Occupied Jerusalem: In the Holy Land, the state of Palestine does not yet exist. But in Hollywood, it already has an Oscar finalist.

The Academy of Motion Picture Arts and Sciences’ announcement that Omar, one of this year’s candidates for best foreign language film, hailed from Palestine has raised eyebrows in these parts, where Israelis and the Palestinians are engaged in peace talks aimed at establishing just such a state.

In contrast, Abu Assad’s 2005 film Paradise Now, which was also nominated for an Oscar, was billed at the time as coming from the Palestinian Territories to avoid the inevitable political saber-rattling over sovereignty.

The United Nations General Assembly’s 2012 recognition of Palestine as a non-member state, over fierce Israeli objections, paved the way for the Academy to change its definition this time around. Abu Assad also said the film qualified as such because it was the first to be almost completely financed by Palestinians.

In any case, he added, the film’s nationality, like his own, was a matter of identity, not geography. “As long as we are under occupation, it doesn’t matter what it is called,” said Abu Assad, 52, who, like many Israeli Arabs, considers himself Palestinian even though he holds Israeli citizenship.

“That doesn’t make us Israeli. As long as the state is exclusive, you can’t identify with the state as long as it doesn’t recognise you as equal.”

The debate over the film’s land of origin touches on the complex status of Israel’s Arab minority, who make up about a fifth of Israel’s 8 million citizens.

Israeli Arabs remained in the country during the war surrounding Israel’s establishment in 1948, in contrast to hundreds of thousands of Palestinians who fled or were driven out during the fighting and later came under Israeli occupation when it captured the West Bank and Gaza Strip in the 1967 Middle East war.

Israeli Arabs hold full citizenship rights, generally enjoy a higher standard of living and more civil liberties than in neighbouring Arab countries, and in many ways have become integrated into Israeli society. Yet they often suffer discrimination and complain of second-class status and frequently identify with their Palestinian brethren. Abu Assad said he considers all of Israel “under occupation” since Arabs do not have full equality with the Jewish majority.

Yousuf Abu Wardi, a veteran Israeli film actor, said he could relate to the identity crisis many of his fellow Arabs felt. “To be Israeli, does that mean I have to stop being an Arab?” he asked. “Until the final borders are defined here, it is going to be very hard to define who is Israeli and who is Palestinian.”

In Omar, a love story set against the backdrop of the Israeli-Palestinian conflict, Abu Assad explores some of these elements by focusing on the plight of Palestinians who collaborate with Israel.

The title character, a Palestinian baker, routinely climbs over the Israeli wall in the West Bank to visit his beloved Nadia. In one of his escapades he is attacked by an Israeli soldier, after which he and his friends decide to kill another soldier in revenge.

After being arrested he is pressured into becoming an informer, setting off a chain reaction of deceptions and betrayals that will test Omar’s loyalty to Nadia, his friends and his people.

Interestingly enough, Israel’s own 2014 Oscar entry, Bethlehem, deals with the same theme of collaboration but focuses more on the intimate relationship between the Palestinian informant and his Israeli handler.

Abu Assad said he made no effort to tell Israel’s side of the story.

“I find any kind of balance between the occupied and the occupier a little false,” he said in a phone call from Los Angeles, where he is awaiting Sunday’s ceremony. “A balance makes it less impressive as a movie. All good movies are told from one point of view.”