After being arrested he is pressured into becoming an informer, setting off a chain reaction of deceptions and betrayals that will test Omar's loyalty to Nadia, his friends and his people.
Interestingly enough, Israel's own 2014 Oscar entry, "Bethlehem," deals with the same theme of collaboration but focuses more on the intimate relationship between the Palestinian informant and his Israeli handler.
Abu-Assad said he made no effort to tell Israel's side of the story.
"I find any kind of balance between the occupied and the occupier a little false," he said in a phone call from Los Angeles, where he is awaiting Sunday's ceremony. "A balance makes it less impressive as a movie. All good movies are told from one point of view."
Yair Raveh, a film critic from Israel's leading entertainment magazine Pnai Plus, said both films were equally impressive. While Israel's "Bethlehem" made an effort to portray both sides and included some national soul-searching, he said the Palestinian "Omar" drew its strength from the rage it projected.
"It's not an anti-Israeli film per se. It just has a lot of anger and anger is good for cinema," he said.
"Omar" has mostly played before art house-type theaters in Israel while in the West Bank it has had only limited viewings. That has not stopped passions from rising over the film — and the Academy's stance on its origins.
"The policy of the government of Israel, among other things, is to establish a Palestinian state. But one doesn't exist right now," said Paul Hirschson, a spokesman for the Israeli Foreign Ministry. "Unfortunately, this does not contribute, to say the least, toward conflict resolution because it doesn't nurture intellectual honesty in the conversation."
The Palestinian culture minister, Anwar Abu Aisheh, called the film a "qualitative step" for the Palestinian film industry. "I'm very proud of this movie. It succeeded in introducing the world of our problems under occupation, of our tragedy."
The movie, which opened in the U.S. on Feb. 21, is the latest in a recent run of Israeli and Palestinian films that have enjoyed success internationally.
Last year, two films were nominated for best documentary; "The Gatekeepers," which included interviews with all the living former heads of Israel's Shin Bet security service, and "5 Broken Cameras," a firsthand account of the protests of a West Bank village affected by Israel's separation barrier. The latter, co-directed by an Israeli and a Palestinian, also faced questions over how the academy should identify it.
Israeli films were finalists for the Academy Award for Best Foreign Language Film four times between 2008 and 2012, giving Israel more nominations during that period than any other country.
All but one of the films dealt with the Israeli-Palestinian conflict, creating a counterintuitive "golden age" of Israeli film in which the government has bankrolled movies that have often shined a critical light on Israeli policies and society.
Abu-Assad said the Palestinians were not yet ready for such introspection.
"The Israelis have less problems with it because it (the conflict) does not control their life," he said. "We have less luxury to deal with other topics even though I would love to."
Still, he said he made an effort to create a movie that was about love and friendship in which the conflict was only part of the background.
"I do not want to make a movie that will die with the occupation," he said. "You want to make a movie that will live forever and the occupation will die one day."
Follow Heller on Twitter @aronhellerap