The films at the Karlovy Vary International Film Festival (KVIFF) are screened in a strikingly compact canyon of mineral springs. These days, their range is spreading out widely, extending to the Middle East once again. In the most closely watched film of the competition this summer, Karlovy Vary premières The Last Step, the latest screen performance by the Iranian actress Leila Hatami. Her award-winning role in The Separation, directed by Asghar Farhadi and nominated this year for an Oscar for Best Foreign-Language Film, may have made Hatami the best-known Middle Eastern actress outside the Middle East. That\'s an asset these days, even in the Czech Republic. The Last Step is directed by Ali Mosaffa, Hatami\'s husband, who plays a character who dies in an accident, but lingers on screen to shadow his wife, a film star, and offer observations about his marriage. The film that Mosaffa\'s character narrates is an adaptation of two short novels - The Dead, by James Joyce, and The Death of Ivan Ilyich by Lev Tolstoy. Hatami\'s presence in the cast could give this literary experiment a lift with the public that such an art film might otherwise lack. The actress and her husband were at the festival in 2005 for the premiere of Mossafa\'s previous film, Portrait of a Lady Far Away, in the KVIFF competition. The Last Step won\'t be the only Iranian film in the town formerly known as Karlsbad. Also in the programme from Iran is A Respectable Family by Massoud Bakhshi, which premièred in the Directors\' Fortnight at the Cannes Film Festival. The film weighs the legacy of the Iran-Iraq War, seen through the eyes of a expatriate professor who returns from the West to teach in Shiraz. Bakhshi is a member of this year\'s documentary jury at KVIFF. On the competition jury at Karlovy Vary this year is the Palestinian actor Makram Khoury. Other competition films that insiders are tracking include Your Beauty Is Worth Nothing by Huseyin Tabak of Austria, the graduation film by a student of Michael Haneke. Its main character is a Kurdish boy who grows up in Austria, not speaking German and fearing deportation, \"This is a debut by a huge talent, told with emotion, when it\'s easier to be ironic and cynical,\" said KVIFF director Karel Och. While KVIFF is considered a major summer film festival between Cannes and the Venice Film Festival, it has struggled to be a market for acquisitions by distributors and has never been a launch for commercial releases. Over the last two years, under the new director Och, KVIFF has turned its comparatively weak industry position into an asset. Films of merit that might be considered small elsewhere now turn up in its competition. \"This year we hoped for more radical choices,\" said Och, citing films like the timely Boy Eating the Bird\'s Food, a feature debut, written and directed by Ektoras Lygizos, 36, which puts a story of deprivation from the headlines into a classic style. The no-budget filmmaker who works mostly in theatre is not alone. The low-budget Dogtooth (2009) got an Oscar nomination, and just last year, KVIFF presented a retrospective of Greek Independent Cinema, mostly made by young directors undaunted by the lack of money. The good news, if that\'s the right word, is that a key subject of this movement - hardship - is the gift that keeps on giving in Athens. \"We hope that these smaller films will have an impact on the audience and on the professionals as well,\" Och said. The films at the Karlovy Vary International Film Festival (KVIFF) are screened in a strikingly compact canyon of mineral springs. These days, their range is spreading out widely, extending to the Middle East once again. In the most closely watched film of the competition this summer, Karlovy Vary premières The Last Step, the latest screen performance by the Iranian actress Leila Hatami. Her award-winning role in The Separation, directed by Asghar Farhadi and nominated this year for an Oscar for Best Foreign-Language Film, may have made Hatami the best-known Middle Eastern actress outside the Middle East. That\'s an asset these days, even in the Czech Republic. The Last Step is directed by Ali Mosaffa, Hatami\'s husband, who plays a character who dies in an accident, but lingers on screen to shadow his wife, a film star, and offer observations about his marriage. The film that Mosaffa\'s character narrates is an adaptation of two short novels - The Dead, by James Joyce, and The Death of Ivan Ilyich by Lev Tolstoy. Hatami\'s presence in the cast could give this literary experiment a lift with the public that such an art film might otherwise lack. The actress and her husband were at the festival in 2005 for the premiere of Mossafa\'s previous film, Portrait of a Lady Far Away, in the KVIFF competition. The Last Step won\'t be the only Iranian film in the town formerly known as Karlsbad. Also in the programme from Iran is A Respectable Family by Massoud Bakhshi, which premièred in the Directors\' Fortnight at the Cannes Film Festival. The film weighs the legacy of the Iran-Iraq War, seen through the eyes of a expatriate professor who returns from the West to teach in Shiraz. Bakhshi is a member of this year\'s documentary jury at KVIFF. On the competition jury at Karlovy Vary this year is the Palestinian actor Makram Khoury. Other competition films that insiders are tracking include Your Beauty Is Worth Nothing by Huseyin Tabak of Austria, the graduation film by a student of Michael Haneke. Its main character is a Kurdish boy who grows up in Austria, not speaking German and fearing deportation, \"This is a debut by a huge talent, told with emotion, when it\'s easier to be ironic and cynical,\" said KVIFF director Karel Och. While KVIFF is considered a major summer film festival between Cannes and the Venice Film Festival, it has struggled to be a market for acquisitions by distributors and has never been a launch for commercial releases. Over the last two years, under the new director Och, KVIFF has turned its comparatively weak industry position into an asset. Films of merit that might be considered small elsewhere now turn up in its competition. \"This year we hoped for more radical choices,\" said Och, citing films like the timely Boy Eating the Bird\'s Food, a feature debut, written and directed by Ektoras Lygizos, 36, which puts a story of deprivation from the headlines into a classic style. The no-budget filmmaker who works mostly in theatre is not alone. The low-budget Dogtooth (2009) got an Oscar nomination, and just last year, KVIFF presented a retrospective of Greek Independent Cinema, mostly made by young directors undaunted by the lack of money. The good news, if that\'s the right word, is that a key subject of this movement - hardship - is the gift that keeps on giving in Athens. \"We hope that these smaller films will have an impact on the audience and on the professionals as well,\" Och said. The festival\'s most closely watched line-up has been the signature East of the West section, reserved for films from Eastern Europe and the former Soviet Union. KVIFF plans to raise this regional feature to the level of its main competition, with entry restricted to first and second films. Among the titles to watch in the East of the West category this year are Rusudan Chkonia\'s Keep Smiling, a scrutiny of contemporary Georgia seen through a \"Georgian Mother of the Year\" contest, and Mushrooming, an Estonian tragicomedy set among a group of mushroom hunters, by Toomas Hussar. Co-productions are helping to put the Middle East into focus at this year\'s KVIFF. Miscreants, a Moroccan-Swiss joint effort, is the tale of a kidnapping of a group of actors by religious extremists on the order of their leader, written and directed by Mohcine Besri. The drama, which revives the much-worn theme of Islamic terrorism, premièred at the Marrakech Film Festival at the end of last year. For once, Arabs won\'t be the only ones depicted as terrorists on film. Piazza Fontana: The Italian Conspiracy by the Italian director Marco Tullio Giordana, reconstructs a deadly and unsolved terrorist attack in Milan in 1969. The 47th Karlovy Vary International Film Festival began on Friday and will continue until July 7 in the Czech Republic Greek films fight against odds • Premèring at KVIFF this week is Boy Eating the Bird\'s Food, the much-awaited feature debut by Ektoras Lygizos, which follows its young hungry protagonist, age 23, as he walks through Athens today, struggling to keep himself and his pet canary fed. • Audiences are likely to see the film operating on two levels - as a window to Athens under the strain of economic crisis, and as an iconic tale of hardship that its director says was inspired by the cinematic classics of Robert Bresson, where drama and symbols overshadow mere facts. • Lygizos, who showed his short film Pure Youth at the 2004 Biennale di Venezia, presented Boy Eating the Bird\'s Food as a work in progress at the Rotterdam International Film Festival earlier this year.