The film 'Ajami' might be entered into the competition by Israel but it is a co-production by Inosan Productions, Twenty Twenty Vision und ZDF/Das kleine Fernsehspiel. Inosan is an Israeli firm. Twenty Twenty is registered in Berlin. ZDF is the second German television channel. As is normal in co-productions, the finances are shared by the partners, so I guess it was not only Israel which paid for this film. So please get off your high nationalist horses.
Australian police arrest 5 over shooting 'linked to terrorism' (Reuters)
from the article: Ajami co-director ahead of the Oscars: I don't represent Israel