Love stories set against the backdrop of war and conflict, military occupation and government persecution, have long been rich ground for literature and film. In The Bubble, set in modern-day Tel Aviv and Palestine, director Eytan Fox shows how even the heady idealism of the young and the frisky - straight couples, and gay - can be tainted, damaged and destroyed by deep-seated ethnic and religious strife.

Yali (Alon Friedmann), who manages a cafe, Noam (Ohad Knoller), who works in a music shop, and Lulu (Daniela Virtzer), a salesgirl in a soaps store, are roommates. The two men are gay, best friends, but not lovers. She is lively, lovely, close to the men. And all three, in their 20s, are actively opposed to the Israeli occupation of Palestine - especially Noam, a reservist in the Army, who spends his weekends manning a Palestine checkpoint, watching the Arabs as they are lined up, searched, humiliated.

It is on one such weekend that Noam first encounters Ashraf (Yousef Sweid), a Palestinian, a closeted gay. Their eyes lock, and later, the two meet again in Tel Aviv. They fall in love, and roommates Yali and Lulu do their best to bring Ashraf into their lives - encouraging him to stay on in Tel Aviv, illegally, giving him a Hebrew name and a job as a waiter in Yali's cafe.

For a time, all seems well. The plans for a big, beachfront rave dedicated to the cause of peace, of tearing down the borders, proceed apace, and all is right in the hip, happening city. But as the title of Fox's film suggests, this trio is living inside a bubble - of blind hopes and unwarranted optimism. Things are bound to burst.

Fox, whose 2004 release, Walk on Water, was a taut espionage thriller, gets the details right here, and the four principals are likable and believable. If the romantic plight of Lulu - who sleeps with a slick Lothario (an editor at Time Out), while ignoring the puppyish overtures of a scruffy, big-hearted political activist - seems like the stuff of a TV soap, it helps to bring the grim realities of life in the Middle East into sharper contrast.

The trickiest piece of Fox's drama isn't altogether successful. After coming out to his devoutly religious sister, Sweid's Ashraf faces family condemnation - and then watches the bullets from a recklessly indifferent Israeli soldier's gun bring a loved one down.

What happens next is horrific, and sad, but also a little too naked in its emotional and political calculations.

The Bubble *** (out of four stars)

Directed by Eytan Fox. With Ohad Knoller, Alon Friedmann, Daniela Virtzer and Yousef Sweid. Distributed by Strand Releasing. In Hebrew and Arabic with subtitles.

Running time: 1 hour, 57 mins.

Parent's guide: No MPAA rating (nudity, sex, profanity, drugs, violence, adult themes)

Playing at: Ritz at the BourseEndText

Contact movie critic Steven Rea at 215-854-5629 or srea@phillynews.com. Read his blog, "On Movies Online," at http://go.philly.com/onmovies.