The Bubble takes its title from the Sheikin Street district of Tel Aviv, a carefree milieu which, for its hip and gay residents, has the illusion of making all the political/racial strife nearby seem another planet away. In a configuration reminiscent of an Israeli “Will & Grace,” Lulu (Daniela Wircer), a victim of hetero romance wars, has two gay flatmates, campy Yali (Alon Friedmann) and the less flamboyantly out Noam (Ohad Knoller), who has recently survived a reserve-duty stint at an army checkpoint, where he witnessed a Palestinian woman’s harrowing miscarriage. At that time, he met Ashraf (Yousef “Joe” Sweid), a Palestinian he re-encounters in Tel Aviv. Moving into Noam’s flat, Ashraf pretends to be Israeli and works with Yali in a café, but must return home to Nablus for his sister’s marriage to a homophobic man involved with Hamas.

Writer-director Eytan Fox (Yossi & Jagger, Walk on Water) continues his examination of the impact of political issues on modern Israelis with this moving, sensitive film. He paints an involving, layered yet humor-filled picture of idealistic young adults trying to make a difference, as with Lulu’s organizing a peace rave to end Israeli-Palestinian strife and the unquestioning charity with which Noam and his roommates take Ashraf under their wing. Fox is good at rendering the complexity of relationships, be it Noam and Ashraf’s naturally fraught union, or Lulu’s rage at being dumped by an an arrogant magazine editor who blows her off right after she finally goes to bed with him, or Yali’s improbable coupling with a hunky but tragically shallow Tel Aviv circuit queen. Through it all you get the constant feeling of twenty-somethings just wanting to get on with their lives and happiness, even under the ever-present shadow of death and destruction in a city where bombings occur with clockwork frequency, along with ubiquitous, accompanying cries for vengeance.

Knoller gives a gay Everyman performance that is as appealingly natural as his more filled-out macho turn in Yossi & Jagger. Wircer is a world-class beauty with a magnetic strength and fierce intelligence. Friedmann blessedly does not overdo Yali’s campiness, conveying the kind of world-weary street smarts only acquired through a hard-knock life in the gay ghetto. The fleeting scene in which he asks Noam why they never made it as a couple is subtly moving. I only wish Fox hadn’t chosen to end this deeply affecting film on such a dire note of sadness. Ashraf’s ultimate, devastating decision feels slightly contrived, however much the filmmaker wants to comment on the senseless tragedy of war. It’s a far too cruel kissoff for audiences who will doubtlessly have given him their complete goodwill.