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STARRING: Lior Ashkenazi, Knut Berger and Caroline Peters


RUNNING TIME: 104 minutes

RATING: Unrated but R equivalent for language, frank sexual talk, nudity

THE LOWDOWN: A Mossad assassin in search of a Nazi is transformed by the aging man's grandchild.

"Walk on Water" is a gutsy, finely acted Israeli film that weaves in the Holocaust, Israeli-Palestinian conflict and gay-straight divide to reveal the dangers of a hardened heart.

That organ belongs to Eyal (popular Israeli actor Lior Ashkenazi), an intelligence agent and assassin. He's the vehicle for director Eytan Fox to examine an Israel he suggests has strayed from victim to perpetrator.

The storyline revolves around Eyal's assignment to kill an aging Nazi and his need to find the war criminal's whereabouts through his two German grandchildren.

The wife of the macho and emotionally straitjacketed Eyal has committed suicide. He is seared by the knowledge his mother's family perished in the Holocaust and is a continual witness to the indiscriminate killing of civilians by Palestinian suicide bombers.

Eyal's dislike of Germans and Arabs, plus his homophobia, are challenged when, posing as a tour guide, he befriends the grandchildren -- Axel (Knut Berger), a gay man from Berlin, and his sister, Pia (Caroline Peters), who lives on a kibbutz.

When Eyal announces to Axel that a suicide bombing has occurred nearby, the German visitor asks, "Did you ever think why these people are doing this? I mean, how desperate they must be to go out and kill themselves?"

"What's to think?" Eyal answers coldly. "They're enemies."

Even raising the issue infuriates Eyal. So does the homosexuality of Axel, whose later one-night stand with an Arab engenders open hostility and a brief but telling showdown.

The film has religious themes, taking its title from a scene at the Sea of Galilee where, as the story goes, Christ called his disciples together. After taking a fall in the water, Axel tells Eyad, "You need to purify yourself, no negativity, no bad thoughts, then you can walk on water."

It's the first glimpse into Axel's heart that becomes the portal through which Eyal can confront his demons and prejudices.

Axel has his own issues stemming from the shame he feels over his family's and nation's dark past, which is reflected, perhaps, in his willingness to have sexual relations only with non-German men.

The film is well-paced and tautly directed and is Fox's third, and second, after "Yossi and Jagger," to place homosexuality in a central role. The imaginative soundtrack -- international, like its cast -- prominently features songs by Bruce Springsteen and Buffalo Springfield.

It's at the end of the film, when Eyal attends the German family's birthday celebration and the plot is resolved, that the film falls apart, marred by a simplistic, Hollywood-like ending and coda that doubly suspend belief.

The picture deserved an ending honest enough to match its subject matter, but that shouldn't stand in the way of seeing it.