Animation Lab's newly-renovated studio in Jerusalem (a Bauhaus-style building from the early 1930s that was formerly the government mint). Photo by Alon Grego. Courtesy of Animation Lab.

Being in Israel has several advantages, Wood acknowledges, not the least of which is innovation on the technical side. What has been lacking is animators' experienced in making features, so the production has had to bring in animators from North America and Europe to supplement the homegrown talent.

"The majority of the animators themselves will probably come from outside Israel, but only because there isn't [CG] feature animation that's been done here before," says Wood. Recruiting animators to relocate to Israel is not always easy -- especially when the nation's image is dominated by events like the recent conflict in Gaza. But Wood -- who is currently looking for talent -- says the day-to-day reality is quite different.

"In Jerusalem, we feel very safe, the quality of life is very good and it's a very wonderful place to work," he says. "It's like when you live in Los Angeles and you hear about riots in South Central or an earthquake in Riverside, it's kind of not in your everyday life, so it doesn't affect you the same way as if you were right there in the middle of it."

Wood expects the talent base in Israel to grow over time and play a larger role in the films Animation Lab plans to make. "There [are] lots of artists, filmmakers and creative people in Israel, so we feel like we want to use as many of those homegrown talents as we possibly can," he adds. "And hopefully with our second and third and fourth movies, each film will be more and more Israeli in terms of the talent."

Doug Wood, director for upcoming Israeli feature The Wild Bunch. Courtesy of Animation Lab.

Aiding that is a number of schools that have developed well-regarded animation programs. Wood says Animation Lab has a relationship with the Bezalel College of Art and Design and the school's teachers and students are both working on the film. Other schools and programs teaching animation include Tel Aviv University, Animation Center, Shenkar College of Engineering and Design, Sapir College, Camera Obscure, Israeli College of Animation and Hasifa at Israeli Open University.

Another animation house on the scene is Crew 972, based in Tel Aviv and founded by Alex and Michelle Orrelle, who met in Israel and worked extensively in the American animation and technology industries. Alex, a Briton who grew up in Israel, attended the Academy of Arts in San Francisco. He's worked in visual effects on such films as The Matrix Reloaded and in animation at Pixar on shorts and features, including The Incredibles. Michelle has production and business development credentials, having worked on projects for such companies as Macromedia and Scient.

The duo returned to Israel after Alex got a job at DPSI, an Israel-based animation studio run by IDT. The studio closed six months after he started, but introduced the Orrelles to the local animation scene and prompted them to open Crew 972. The studio's first projects came from the Orrelles' connections in the U.S. and their reputations.

"It wasn't easy because really Israel at the time didn't have a name as an animation outsource destination," Alex says. "The pricing wasn't as attractive as some of the Asian and East European studios, but the fact that I was from Pixar, it helps people takes the chance with us because they knew we speak fluent English and the quality of animation was what they were looking for."

Most of the work Crew 972 has done has been for American and European clients, though they have produced a couple of commercials for Israeli TV and a short informational film for the government. Their clients have included creating a stereoscopic 3-D film for the Coca-Cola World Cup Tour traveling exhibit, and they specialize in character animation for film, TV, the Web and gaming.

They also have been developing original properties, such as Adrenaline Lemmings, about a group of four lemmings who live in an urban setting and partake in extreme sports stunts that always end in tremendous pain. Disney picked it up for development as a series of short films, until the recent economic downturn prompted Disney to fold that division. The Orrelles are seeking a new home for the property and also are doing some tests for Warner Bros. Animation. There are challenges to being in Tel Aviv, they admit. Michelle says one problem is being so distant from the rest of the industry requires extra effort to maintain important connections.

Alex says costs are higher in Israel than in other outsourcing destinations, but there is plenty of talent looking to learn about animation and a few cultural advantages.

"Because the Israeli culture gets Western humor and Western media, it's easier to find talent here that can give the creative response that is needed for many projects," he says.

Thomas J. McLean is a freelance journalist whose articles have appeared in Variety, Below the Line, Animation Magazine and Publishers Weekly. He writes a comic book blog for Variety.com called Bags and Boards, and is the author of Mutant Cinema: The X-Men Trilogy from Comics to Screen, forthcoming from Sequart.com Books.