'THE MEN Who Stare At Goats" is a fictionalized adaptation of a novel based on actual events involving real people.

Where the fiction ends and the truth begins is hard to figure - and hard to see.

The film takes place largely in Iraq but was shot in New Mexico and Puerto Rico.

"We shot most of the exterior desert stuff in New Mexico in November and December and it was absolutely freezing," star Ewan McGregor ("Star Wars" episodes I-III) told the Daily News at the Toronto International Film Festival in September. "We're freezing cold and in between each take someone comes in and sprays us down with sweat to make us look warm."

But that wasn't all the movie magic.

"There's white, white sand there," McGregor said, "and they had to color correct it in the film to make it a little yellower."

In "Goats," McGregor plays a reporter who heads to Iraq in search of a big story and the recovery of his manhood. There, he meets Lyn Cassady (George Clooney) who informs him of the work of Bill Django (Jeff Bridges), a visionary military man who used Army funds to create a New Earth Battallion that might wage war using paranormal activity.

It's all more than a little bizarre, but McGregor said, "I think all of the film is true other than my story line with George through the desert. All of the stuff that we flashback to, all of the stories that I learn from George and that we see in the movie - the goats, Bill Django going off to research for six years and writing his New Earth Army manual - is all true. And somebody did apparently kill a goat with their mind. And remote viewing was absolutely worked on by the military and supported financially."

What about the New Earth Army soldiers referring to themselves as Jedi, Mr. Obi-Wan Kenobi? Wasn't that put into the script just for you?

"No," McGregor replied. "That was one of the first questions I asked Grant [director Grant Heslov] when he came to speak to me and we discussed the script. I said, 'Does it bother you that there are so many references to Jedis and the fact that my character doesn't know what Jedis are when I am one?'

"He claims that he never thought about it before that moment, but whether I believe that or not I don't know. I'm not sure."

The truth's relationship to journalism is often a topic brought up in a Clooney/Heslov film but it's a gray area as to where they see journalists today with regard to the standards set by Edward R. Murrow (as portrayed in Clooney's "Good Night, and Good Luck").

"Certainly I played it that [my character] was a teller of truth," McGregor said, "and at the end of the movie when George flies off in the helicopter he says, 'You're the mission. You've got to tell everybody what's happening.'

"My character goes back and he tries but he's ignored, no one's interested in the story. But I don't think he's shown as being gullible. He becomes a believer in something. . . . To begin with he's empty and emasculated by his wife and by the end of the film he's kind of found himself a little bit."

As for "Goats" being a black comedy commentary on the Iraq War, McGregor disagrees.

"There's comment about the Iraq war in it but it's not really about the Iraq war," he said. "You can make political and social comment through comedy, but we didn't set out to make a comedy about the Iraq war and I don't believe that's what the film is about. The comments that are there . . . I'm happy to be part of."

But did the film change his view of journalists?

"It's not necessarily that they want something to be funny or cute," he said of reporters, "but they do want a story and they're generally quite willing [to revel in salacious facts about someone].

"I've traveled through most of Africa and I was in Malawi for UNICEF with a press man.

"We had just met a teenage mother who was 19 and she was dying of AIDS. There was nobody there to look after her and all of her family had deserted her because she had the virus. Her husband had left her and she was dying in a hut with her little baby beside her. And as we walked away - it's always very difficult to walk away, I find that the hardest thing of all - this press man looked at me and said 'We're getting an embarrassment of riches.'

"I was so horrified. I can understand that being a journalist you have to be somewhat detached from it, it's like being a doctor or something. You are telling stories and you hope those stories do good in the world. But to leave this dying girl and to consider it in any way 'riches' was just shocking to me."

So McGregor is still wary of the war and the press, but what about paranormal activity? Did he come away from "Goats" with new feelings about the powers of the mind?

"I'm totally split on it really," he said. "My cynical side thinks that if there were any truth to it we would have learned how to enhance it by now. But other times I think about how often you think about somebody out of the blue, someone you hadn't thought about in years, and then the next day they phone you.

"There are connections to energy that I think are interesting, but I don't think I can run through a wall."