Waltz with Bashir is based on Ari Folman's experiences as a young Israeli Defense Force solider on duty in a Beirut refugee camp during a massacre. © 2008, courtesy of Sony Pictures Classics.

Until just a few months ago, Israel was far from being considered an animation powerhouse. But that was before the one-two punch of Waltz with Bashir and $9.99 shone a historic spotlight on the tiny nation's animation industry and raised expectations for the next feature project to come out of Israel.

Not surprisingly, things are definitely on the rise, with an animation studio working on the nation's first CG feature film and others competing for and landing work for clients all over Europe and North America. There are also a growing number of animation schools turning out talented and creative graduates capable of doing world-class work.

But interestingly, neither Waltz with Bashir nor $9.99 benefited from these more recent advances in the local industry.

In fact, Bashir director Ari Folman says there was no animation industry in Israel to draw upon when making his acclaimed animated documentary about his experiences as a soldier during Israel's 1982 offensive into Lebanon. He and his producing partners were forced to basically invent their own techniques, resulting in a mix of Flash, traditional and 3D animation.

"There were only eight animators in Israel qualified to do the job," Folman told AWN last month. "We started with six, then we found another two. We needed two more and we couldn't find them. So this is the state of animation [in Israel]."

The characters in $9.99 look for the meaning of life in the new stop-motion feature by Tatiana Rosenthal. © Regent Releasing.

Similarly, $9.99 director Tatia Rosenthal learned animation at the Tisch School of the Arts and has made her home in New York for the past 15 years. Though the stop-motion film adapts the stories of popular Israeli writer Etgar Keret, Rosenthal suggests that what really made the film possible was the work she did in the U.S. and that producer Emile Sherman did in Australia.

"The support from Israel came because of Etgar's talent and reputation and establishment in the industry. I think the fact that I complemented his stories helped, but I don't think the film got made based on the state of the animation industry in Israel," she explains. "There was no infrastructure."

However, things are better for the next generation of animators in Israel, where a studio called Animation Lab is in pre-production on the country's first CG-animated feature, The Wild Bunch. Directed by Doug Wood, the film is based on a script by Philip LaZebnik -- writer of Pocahontas, Mulan and The Prince of Egypt -- about farm plants that are attacked by genetically-altered corn stalks.

The project was funded by venture capitalist Erel Margalit through his Jerusalem Venture Partners, and Wood credits Margalit with having the vision to get the project going. "He loves animation and has a vision," says Wood. "He thinks that stories started here in Jerusalem thousands of years ago and there's a thriving cultural community here that hasn't been tapped."

Wood admits the task is challenging, with Tel Aviv being the more obvious choice for such a studio given its artistic reputation. "It's kind of a bit of a pipe dream that we could create a movie studio in Jerusalem and draw top-level talent here," he says. "But we're finding that it is possible."

The Wild Bunch is nearing the production phase, with work proceeding on the fifth and final story reel before it will be ready for production. Wood says the voice cast, which includes Abigail Breslin, Willem Dafoe, Elizabeth Hurley, Willie Nelson, George Takei and Chris Klein, has already been recorded. The production pipeline is being built, and the characters have been designed in 2D and 3D, with most of the environments also near completion. The film has no distributor yet, but Wood says their sample footage has generated significant interest.