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Five days into the Venice Film Festival, life on the Lido is barely recognisable. Anglophone critics are usually in the critical ward by this stage, suffering brain fatigue or with their eyes in traction after excess subtitle exercise. But English-speaking films have outnumbered foreign ones, so far, by three to one. The festival talk is all about the filmmakers Brian De Palma, Paul Haggis, Ridley Scott (bringing Blade Runner: The Final Cut) and the Kenneths Loach and Branagh, Anglo-Americans to a man.

Have we been secretly teleported to Venice, California, instead of Venice, Italy? When did the Golden Lion last serve populist fare such as the George Clooney thriller Michael Clayton (murder, skulduggery and Tilda Swinton glammed up as an evil corporate lawyer), the army-base thriller In the Valley of Elah (a bread-and-jam whodunit in spite of Haggis’s thick spreading of Iraq war allusions) or Branagh’s loop-the-loopy attempt to refashion Sleuth with a Pinter script and Michael Caine and Jude Law playing hide-and-seek amid the arty camera angles.

Mostra del Cinema director Marco Müller, lobbying for an extension to his four-year term which ends with this festival, perhaps wanted to be all things to all moviemanes. He has not neglected the eggheads, even so. The competition boasts new films from Rohmer, Chabrol, Mikhalkov and Greenaway, the last-named now less a Briton, more an honorary Dutchman, especially with his new film about Rembrandt, Nightwatching.

A Müller accused of Hollywood bias might also point to the internationalism of the sideshows. And he could dispute the equation of US cinema with empyheadedness. Brian De Palma’s Redacted has been the revelation so far. From a veteran who we had thought was vanishing up the cul-de-sac of his own thriller fetishism (Femme Fatale, The Black Dahlia), here is a dazzling renewal. Masquerading as a patchwork of amateur video diaries, CCTV footage, TV reports and blogs, De Palma’s fictional tale of four American soldiers going on a rape-and-murder romp in Iraq – the planning, the atrocity, the aftermath – is like a Middle East makeover of the director’s Casualties of War.

Crafted not just for a new conflict but also for a new age of multiform, open-access image technology, this is a brilliant film with a passionate payload of political conviction. The Iraq war disgusts De Palma, as it disgusts many honourable Americans. It disgusts him for both the waste of human life and the corrupting of the human spirit. War warps. War without belief, strategy or legitimacy warps absolutely.

So the soldiers’ conversation exchanges dense with obscenity, their self-pity, their xenophobia, their trigger-reflex violence at every checkpoint or on every street – these are the weapons America has used on Americans, not just on Iraqis. At first, in De Palma’s maze of visual styles, we feel as lost as the men in their moral labyrinth. But that is the point. Here is hell: try to find your way out. We can do so only by following the trail of blood and fire, by empathising with the young fighters, these ruined princes of American privilege, and by weltering in the horror of a war in which every outrage on the open field is matched by another, possibly worse, caught by the cameras of stealth – nightmares in night-vision.

The new film from Paul Crash Haggis also addresses Iraq. In spite of the biblical title (invoking the David and Goliath showdown), In the Valley of Elah trades the earlier film’s Oscar-anointed self-importance for a confidently crafted thriller about murder among returning Iraq war soldiers. Tommy Lee Jones, Charlize Theron and Susan Sarandon lend acting heft. Haggis pipes in pertinent sonorities about war’s damage to the soul and psyche.

Lust, Caution, a Chinese-language film from the now Hollywood-based Ang Lee (Brokeback Mountain), was rudely dubbed a “bonkfest” by critics unable to see the art for the eroticism. The rest of us watched with respectful attention, albeit through steamed-up spectacles in some scenes, as Tony Leung’s wartime collaborator with the Japanese made love – over and over, in every position – with Tang Wei’s Mandarin Mata Hari. Think of The Night Porter, with a touch of Hitchcock’s Notorious. Already condemned to an NC17 certificate in the US (the country’s most stringent rating), it probably deserves the over-17 audience it will get. They will appreciate the design, guile and sophistication of this movie about design, guile and the choice between evils.

As the Golden Lion weighs up contenders, it may also consider Ken Loach’s It’s a Free World. This – surprise! – is a social-political drama about life among Britain’s underclasses. Loach and his regular screenwriter Paul Laverty baptise a feisty, bleached-blonde female job agent (Kierston Wareing) in the perilous fire of illegal-alien hiring. Hapless Poles and Ukrainians queue up for humiliation, in an England where the poor fight the poor for survival, while venal gangmasters rip them off and the police look the other way. It’s a grim world. For half an hour it’s a grim movie. But Wareing’s character and performance – less a saintly straight-arrow dissident, more a maverick rebel who will cut any moral corner – give the film energy and a freshening ambivalence.

What else? For sleek mischief and sly wit we have had Chabrol’s latest murder thriller, The Girl Cut in Two. For eternal teenyboppers – that’s all of us – we will soon have had Brad Pitt in The Assassination of Jesse James by the Coward Robert Ford (prize for most marquee-busting title). And for collectors of wacky festival design we have the art director Dante Ferretti’s stunning faux demolition ball, seen hanging through a giant hole in the façade of the 80-year-old palazzo del cinema.

It’s a sign and a symbol. For Venice is shortly to get a new viewing HQ. That will be a last goodbye to Benito Mussolini, who founded the festival. Other people, since then, have made it run on time and given it the spirit of life and freedom.

Martin Hoyle’s review of ‘Atonement’ will appear on Thursday

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