LOS ANGELES — For Israelis, winning the country’s first Oscar would be akin to scoring the first Olympic gold medal at the 2004 games in Athens.“If ‘Footnote’ gets the Academy Award for best foreign-language film, the reaction would be tremendous,” said Katriel Schory, executive director of the Israel Film Fund, the body that funds Israeli moviemaking. “We need any piece of good news and it would cheer everybody up.”

“Footnote,” by writer-director Joseph Cedar, was selected among entries from 63 countries to compete as one of the five Oscar finalists despite a highly unorthodox cinematic theme — a rivalry between two esteemed Talmudic scholars who are also father and son. The film’s toughest rivals are likely to be Iran’s “A Separation” and Poland’s “In Darkness.”

In the first few decades of Israel’s existence, filmmakers created some appealing movies — among them the unforgettable “Sallah” from 1964 — but in general the pictures lacked the professional sheen and high production values necessary to compete at the international level.

This has changed drastically in last dozen years, as witnessed by a string of awards at prestigious international film festivals. Even more impressive, in four of the last five years Israeli entries have made the Academy Awards’ list of five finalists, though none has taken home a golden statuette.

Schory, who has been active in the Israeli movie industry for four decades and whose knowledge of his country’s film scene is considered unequalled, cites three reasons for the international recognition now accorded to Israeli films.

One is the strength of their stories, which are “daring, engaging, straightforward, told with chutzpah and rooted in our very turbulent society,” Schory said.

“We live on the edge at all times, amidst endless conflicts in a multicultural society. So unlike the U.S. and UK, very few of our films are based on book adaptations. Our filmmakers have their own powerful stories to tell.”

Second, Schory cites a new generation of directors who are trained in some 14 film schools in Israel, including one in Sderot that has stayed open despite rocket barrages from the nearby Gaza Strip. Also, young Israelis have a chance to learn and polish their creative skills early on: In some 250 high schools, students can submit their own films as part of their matriculation examinations. After they graduate and enter the armed forces, they often can hone their craft further in film crews attached to military units.

Third, Schory said, “We have developed a cadre of skilled producers who can deliver a picture in time and within budget.”

Foreign observers have frequently expressed their surprise at the sharply critical attitude of Israeli films toward their own society and government, sometimes to the point of self-laceration. Under the rules of the Israeli Film Academy, the year’s best picture chosen by its members automatically represents the country in the Oscar competition.

Among past winners have been movies such as “Life According to Agfa” and “What a Wonderful Place,” in which it was difficult to encounter a single decent Israeli character among the array of lowlifes, pimps and manipulators. Even the military defending the country in a just-concluded war comes in for some sharp criticism in recent Israeli movies.

In a seeming irony, these and all other movies made in Israel are subsidized by government funds, a common practice everywhere in the world except the United States. Schory insists — and interviews with numerous Israeli producers and directors confirm — that the power of the purse is never used to enforce political correctness.

“We can pay up to 70 percent of a movie’s cost and there’s no criterion other than the quality and promise of a project,” Schory says. As for the movies’ storylines, “We are a self-critical people. We speak our minds; that’s part of our lives.”

Schory’s Film Fund, designated as a nongovernment organization, operates on an average annual budget of $5.2 million — pocket change by Hollywood standards. Still, that’s enough to provide the basic financing for between 14 and 18 feature films produced in Israel each year among some 200 proposals received in Schory’s office.

“Occasionally we will get a script full of completely twisted facts,” Schory said. “In that case, the selection committee and I will ask the producer come in and answer some questions. But we give the filmmaker a lot of leeway in interpreting the material.”

He added, “In the last 12 years, I’ve green-lighted 150 feature films, and the process is all out in the open.”

Despite the tremendous pressures on the state budget for security, immigration and so forth, the allocations for the film fund rarely face opposition by Knesset members or outraged citizens. There seems to be general agreement, at home and abroad, that Israeli films play a crucial role in boosting the country’s image in the outside world.

“There are beautiful things about Israel and there are some ugly parts, like in any other country,” Schory said. “What our films show is that we are not just about CNN bulletins and newspaper headlines, but that we are a complex, multifaceted society. We are not a one-track country.”

Circling back to the Academy Awards, Schory noted that an Israeli Oscar might have a benefit beyond raising national morale.

“I think an Oscar can only encourage our political establishment to continue its support of our film industry,” he said.