The nominations will be announced Jan. 23; the Academy Awards ceremony will take place Feb. 25.
Director Dror Shaul based "Sweet Mud" on his own experiences as a young boy in the 1970s, living on a left-wing kibbutz in the northern Negev.
For those of us raised with images of the kibbutz as a utopian ideal, representing the very best of Israel and the embodiment of the "new Jew," this film, for all its artistic virtues, is a downer.
Twelve-year-old Dvir, heart-wrenchingly portrayed by Tomer Steinhof, spends his nights in communal dormitory and the evening hours with his beautiful young mother Miri (Ronit Yudkevitz).
His father died under mysterious circumstances, his older brother is leaving for the army and Dvir is left as the only real companion for his mother, who balances precariously on the edge of insanity.
Between caring for his mother and trying to find her a husband, preparing for his own bar mitzvah and wrestling with adolescence and the first pangs of love, Dvir carries a heavy load.
There are some relieving flashes of humor -- none funnier than when a young, flustered woman teacher tries to explain the anatomy of sex to the just-awakening kibbutz boys and girls.
But the underlying tragedy of Dvir's young years is that for all of its professed idealism, the kibbutz's indifference or insensitivity to the mother's plight leaves her to wrestle alone with her demons.
"Sweet Mud" (the Hebrew title is Adama Meshugaat, literally "Crazy Earth") has considerable acting and visual merits, but it continues the unfortunate tradition by the Israel Academy of Films of selecting the most self-critical and downbeat portrayals of its society to compete in the Oscar races.
Last year it was the self-lacerating "What a Wonderful Place," which featured a sordid lineup of Israelis who pimp and rape imported Russian prostitutes, brutalize their foreign workers, cheat on their spouses, humiliate their children, and commit suicide.
The quality of Israeli films has improved markedly in the past decade -- "Walk on Water" and "Yossi & Jagger" are notable examples -- and the willingness of Israeli filmmakers to take on their society's shortcomings put Hollywood to shame.
But someone needs to tell the Israeli academy that a large proportion of Oscar judges are American Jews who may not all be ardent Zionists but who resent heavy-handed portrayals of most Israeli Jews as all-around lowlives at worst, or uncaring human beings as best.
So it's little wonder then that no Israeli film has ever won an Oscar, and the last time the country placed among the five final nominees was in 1984.
The Journal put this point to 36-year-old director Shaul during a phone interview.
"We can't be expected to make films in order to please others," he said.
From an artist's point of view he may be right, but now that Israel has garnered its first Olympic gold medal, it would be very nice to see an Israeli producer clutch one of the golden statuettes on Academy Awards night.
"Black Book" marks the return of Dutch director Paul Verhoeven ("Total Recall," "Basic Instinct") to his native land, and he has chosen to depict his countrymen under Nazi occupation during the last year of World War II.
The central figure is a beautiful Jewish Dutch cabaret singer, Rachel Stein (Carice van Houten) who joins a resistance cell after seeing her parents gunned down by Wehrmacht soldiers.
She is assigned the task of seducing the chief of SS intelligence in Amsterdam, but then falls under suspicion of having betrayed her resistance comrades.
It would be unfair to reveal more of the plot of this gripping, realistic thriller, but what makes "Black Book" truly notable is Verhoeven's unblinkered view of his countrymen during the Nazi occupation.
Contrary to post-war legends, not all resistance fighters were unblemished heroes. Even strong men and women could break, old political quarrels continued, and some would betray their comrades for money or safety.
Even more surprisingly, the film pulls no punches in showing the widespread anti-Semitism in the land of Anne Frank, even among those who resisted the Germans.
When a farm family hides Stein, she is told: "If you Jews had listened to Jesus, you wouldn't be in this situation."
At another point, when resistance cell members discuss whether Stein betrayed them, one opines: "You can never trust a Jew."
This year's foreign-language film competition is made even tougher by entries from an unlisted 62nd country, the United States.
One is Mel Gibson's "Apocalypto," whose dialogue is in Yucatec, a primary Mayan language. The other is Clint Eastwood's "Letters From Iwo Jima," which is entirely in Japanese.
"Sweet Mud" (www.cinephil.co.il) has been selected by the Sundance Film Festival as one of 16 films in international competition, and will be shown Jan. 24 and on subsequent dates. "Black Book" (www.sonypicturesclassics.com) will open in Los Angeles March 9 at Laemmle's Playhouse 7 in Pasadena and Town Center 5 in Encino. For more information, visit www.laemmle.com.