The unholy story of Israel's City of God

Dusk is falling rapidly as Esther Saba – Arab, Israeli citizen and Christian – sits in her yard dispensing lemonade and mint tea to her visitors and talking about her problems.

She mentions the eviction order hanging over her home, her husband's heroin addiction, the wealthy new Jewish residents moving into her home town's rapidly gentrifying neighbourhoods and the worry of bringing up three children safely in a district where there was yet another fatal drive-by shooting only a fortnight ago.

At an intersection a couple of blocks away, armed police use their two Jeeps as a temporary checkpoint to examine the IDs of passing local Arab youths. The checkpoint would seem entirely normal in the West Bank – but not here on Israel's picturesque Mediterranean coast, less than five minutes' drive from the heart of Tel Aviv.

For this is the Ajami district of Jaffa, the eponymous setting for the relentlessly gripping Jewish-Arab feature film of crime, poverty and violent feuding in an ethnically-mixed community. It took less than a month to shoot on a shoestring budget with local amateur actors, but has won a string of awards and was nominated for an Oscar. It went on release in Britain for the first time yesterday.

One of the film's stars Shahir Kabaha is now back working in his father's bakery, after a trip to Hollywood for the Oscar ceremony. He acknowledges that the film initially upset some of the city's residents for unflinchingly "washing their laundry in public". But Mrs Saba, in her yard, says emphatically: "This movie is my reality; the reality of each one of us."

The film grew out of Jaffa's streets as well as being filmed on them. Scandar Copti, the co-director with his Jewish colleague Yaron Shani, is from here. He is a Christian, Palestinian-Israeli son of a local school principal who trained as a civil engineer before becoming a film-maker.

The story captures with vivid authenticity what the producers describe as the "the tragic fragility of human existence in the enclosed community of Ajami, where enemies must live as neighbours".

It is told first through the eyes of Nasri, a sensitive 13-year-old, whose family is at risk after his uncle killed a member of a Bedouin clan running a protection racket. A neighbour fixing his car is killed in a drive-by shooting when he is mistaken for the teenager's older brother, Omar. There is a weave of other characters: Malek, the West Bank Palestinian with a desperately ill mother who sneaks into Israel to work; Dando, the hard-bitten Jewish Israeli cop, haunted by the disappearance of his own brother; Abu Elias, a well-off Christian restaurant owner whose daughter is in love with Omar but cannot marry him because he is a Muslim; Brinj – played by Copti himself – whose dreams of a future with his Jewish girlfriend are upset by a street brawl in which his brother is accused of involvement in the stabbing of a Jewish neighbour. But at the core of the film is Omar's desperate struggle to raise a huge sum – agreed at a reconciliation meeting, a sulha – to end the feud.

If Ajami sounds over-plotted – and this is only the half of it – it doesn't seem like it. It has been compared to City of God. While the Brazilian film is much more violent, the two share a willingness to confront the audience with an uncomfortable reality; one that has no neat, happy ending. While Ajami exposes the tensions within as well as between ethnic, religious and socio-economic groups, it never treats its main characters – Arab or Jewish – as cardboard cut-outs but as suffering, painfully understandable, individual human beings. The constant use of improvisation, albeit within a tightly scripted storyline, often gives it the spontaneous feel of a documentary. All but three of the actors in the riveting sulha sequence were told that it was for real, making the tension and anger all the more credible. Every Saturday for six months, Copti went to genuine sulhas to understand how they worked. "Then I brought a lot of people to Jaffa for what they thought was a real sulha and told them that there would be a crew filming it for a documentary. We filmed about an hour and twenty minutes, including the eating of the lamb [which ritually celebrates the reconciliation] and then cut it to about four or five."

Yaron Shani had originally conceived an urban crime drama shot in this way when he was a student at Tel Aviv's famous film school. But the idea only came alive years later when he met Copti, who had entered a short film in a contest Shani was helping to organize. Shani asked Copti if was interested on working on "something bigger" and the seven-year, intensely co-operative, mutually dependent process of bringing Ajami to the screen was born. Shani had thought a Jewish-Arab setting might be "very interesting" but until he met Copti he was, by his own admission, among the many Israeli Jews who know little about the country's 1.5m Arab citizens, despite the fact that most speak Hebrew as well as Arabic (the reverse is only true for a minority of Israeli Jews) and vote in the same elections. A characteristically Israeli row erupted over the film hours before the Oscars, when Copti said he did not see himself as representing Israel "because I cannot represent a country that does not represent me." Right wing politicians queued up to denounce what they saw as Copti's ingratitude for state funding which had helped to finance the film. Yet Copti's remark – and the film – highlights some of the underlying problems of the Arab minority in Jaffa and, by extension, that in Israel.

You don't have to spend long in the real Ajami to have a glimpse of what a few of the grievances are: employment discrimination, municipal neglect; a hostile police force; poor schooling. Mrs Saba is convinced that the recent murder – a drive-by from a motorcycle just like in the film in a suspected gang hit – will remain unsolved, like dozens of others in the last decade. "I can take you to Kedem [a street in Ajami] and there's a police patrol going by every five minutes," she says. "Yet it took them half an hour to get to where the shooting happened." Perhaps the murders are unsolved because witnesses won't talk to the police? "That's true," says Mrs Saba's friend Theodora Deeb. "If the people who did this found out you had talked, you would be the next one in the grave." Mrs Saba agrees, but insists – an almost universal complaint by Palestinians in Jaffa – that there is a completely different standard of law enforcement between cases in which Arabs and Jews are the victims. "If the government really wanted to make Jaffa a better place they could. They know exactly who the killers are, but they think: 'Let them [the Arabs] kill each other.'"

As with the police, so with education and employment, say the two women. The 49 per cent drop-out rate at Arab Jaffa state schools is much worse than in neighbouring, overwhelmingly Jewish Tel Aviv and Mrs Saba believes the municipality just doesn't care. "I can take you to a park near here where you will see all the nine-year-olds hanging out instead of going to school. But nobody calls the parents." Mrs Saba, a manicurist and the household's only breadwinner, says there are few role models and incentives to suggest that education is worthwhile. "If a youngster goes for a job from high school what is the first question they ask? What he did in the Army? What is his ethnicity? They have left the Arabs the jobs like drug dealing, killing, shooting and stealing." It's a relief, against this bleak background, to meet Shahir Kabaha, who plays Omar in the film. Over a narghila in his local café, Mr Kabaha, 25, defends Copti's remark. "If Tarantino made a film about the war in Iraq, does that mean his movie represents America or Iraq? No, it's a Tarantino movie." He says that a loss of traditional control by the sheikhs – or community leaders – in Jaffa has much to do with crime and schools that are "out of control". But he agrees with Mrs Saba about the police. "About 15 years ago three Arab guys killed a Jewish guy in Jaffa and one of them ran away to Gaza. They got him even in Gaza. But if an Arab kills an Arab they don't do anything." Mr Kabaha, who wants to act full-time, is too intelligent to give up his day job for now. He works in Abu Shadi, the bakery run by his father, which is famous for its stuffed pastries, or bourekas. He admits to being "frustrated" by finding he cannot get Jewish roles – the large majority – in television drama. He could do it with consummate ease, as he was partly educated at a Jewish school, speaks faultless Hebrew and is physically indistinguishable from any other Israeli 25-year-old in his trainers, jeans and t-shirt. Mr Kabaha is proud of having "many" Jewish friends. Almost half the customers at Abu Shadi are Jewish. But he distinguishes between the many Jewish residents of Jaffa, who relish living in a mixed community, from two other groups. The most recent arrivals are ideologically-minded former settlers evacuated from Gaza in 2005 who have come to Ajami with the deliberate goal of helping to "Judaise" a mainly Arab neighbourhood. The others are wealthy Jewish incomers eager for a substantial home by the sea, sometimes in a gated complex, close to the historic Old City of Jaffa.

Every Palestinian in Jaffa believes that eviction orders have been served on around 500 houses, including Mrs Saba's, to make way for such developments. In the 1948 war, Jaffa was bombarded relentlessly for three days by Jewish paramilitary forces. The fighting and the flight of refugees from Jaffa reduced the Palestinian population from more than 70,000 to around 4,000 (a number which has now more than quadrupled). Most of those that remained had to rent houses that had been confiscated by Israel after the war. From the early seventies, in exchange for paying "key money" to the public housing authority, most tenants in the Arab quarters like Ajami paid low rents, which were often not even collected. But from the nineties, the land developers moved in and the authorities began to issue eviction orders, for previously overlooked "offences" like rent arrears or, in as in Mrs Saba's case, for adding extensions without a permit, something that is notoriously hard to come by. "They want to push out the people from Jaffa," says Mr Kabaha. "This would be the most perfect country in the world if it was based on people who want to solve problems and not on people who want to make money on the back of those problems." One of the several achievements of Ajami is not only that, as Copti puts it, it digs "deep into Palestinian society", but also that it tells its compelling story without clunking exposition of all this political context. Instead it shows the consequences of it, leaving debate for after the film has ended. "We felt that dealing with the human side is the only way to address the big issues that are behind everything," as the two directors, one a Jew the other an Arab, put it jointly in the promo notes for the film. "But all the social problems revealed in the stories of Ajami are governed and generated by politics."