Divine Intervention: A Chronicle of Love and Pain was directed by Palestinian filmmaker Elia Suleiman (also the star), and won the Grand Jury Prize at the Cannes Film Festival in 2002, as well as the Fipresci Prize. The film centers on some of the more absurd aspects of the interaction between Israeli citizens and Palestinian citizens: neighborhood feuds, walking across innumerable access points just to meet a friend, et cetera. The movie was extremely well-received in Europe, winning all manner of awards and frequently described as a "masterpiece". It is a comic film, while exposing satirically the irony of the questionable status of the West Bank and Gaza Strip.

A great deal of controversy surrounds this film, however; the Academy Awards have so far refused to include Divine Intervention in its considerations for Best Foreign Film, using highly variable logic. At first, it was claimed that DI could not be entered because Palestine was "not a country." Accusations of racism rapidly began to fly from both sides; the Academy had previously considered films from other territories for the category (including Hong Kong and Taiwan). Palestine's international status is arguably better than Taiwan's, which holds no seats at the United Nations (Palestine holds an observer seat). The Academy soon retracted its statement, replacing it with one saying that DI was never formally submitted into the competition. This was acknowledged by the filmmakers; however, they say that the Academy's negative response prompted them not to submit the film.

Divine Intervention does not appear on the nomination list for the Academy Awards, so it would appear that the Academy has won. Nonetheless, outcry continues on the subject.