Full report of the 60th Edinburgh International Film Festival (14–27 August 2006, Scotland) by John Orr.

The defining moment of this year's festival was the standing ovation given by a packed audience to a frail Arthur Penn after his Reel Life interview with festival director Shane Danielsen. The mood had been set by a prior showing of Night Moves the gem of this year's Seventies American retro-event, and was clinched by Penn's sharp wit, powers of recall and curt dismissal of modern Hollywood. Afflicted by bronchial illness, he still had the guts to mock Tom Cruise's performance in Mission Impossible with Brian De Palma sitting in the front row. Indeed Penn upstaged all the Hollywood Celebs paraded here – De Palma, Spielberg, Sigourney Weaver and Charlize Theron – by giving due credit to all his great actors and singling Gene Hackman out for special praise in his underrated noir. If ever a seventies movie cries out for re-release, this is it.

The celebs were needed – and Sean Connery also piled in with his own Hollywood brickbats – because of the lack of quality in many new releases. The American Independents were mostly cute and vacuous and with the exception of London to Brighton too many British premieres were under par. Someone Else was a sharp rom-com but stopped abruptly after 77 minutes, so much needed laughter came from John Malkovich in Colour Me Kubrick, (or Carry on Malkovich?) based on the true story of a gay Kubrick impersonator fleecing hapless wannabes in 1990s London. The European entries had a classy French revenge thriller, The Page Turner done in glacial style à la Chabrol and a Polish deconstruction of the cop thriller, Palimpsest by Konrad Nieswolski, with unsettling close shots and sea-green filters that made it a cross between Se7en and A Short Film about Killing. But the star turn here was Stefan Krohmer's German chamber-drama set on the Baltic coast Summer 04. With strong elements of Bergman, Rohmer and Polanski's Knife in the Water, it gave to its intimate power-games and duplicities a corrosive, cynical edge that came from confronting moral choice head on rather than wishing it away. It so exuded confidence in its dissection of bourgeois mores that it wrong-foots its audience halfway through the film and then again in its unexpected ending.

The top feature and top documentary were both shot in from the Middle East. The Iranian It's Winter, an ascetic remake of The Postman Always Rings Twice, was directed by Anglo-Iranian Rafi Pitts and casts a local engineer and a Bollywood star opposite each other in the main roles. Its bold mise-en-scène takes intimate body language and off-kilter eye-line matching into new dimensions, while it triumphantly sets the austere snowscapes of an Iranian winter against the jarring industrial topography of a changing society. My Country, My Country is a harrowing documentary of the chaos surrounding the 2005 elections in Iraq, using three parallel stories, a Sunni Muslim candidate debating with his Baghdad family whether to stand for office, an American brigade still desperate to convince itself it is doing good, and a group of Australian mercenaries who head out to Kurdistan for an arms delivery when things get hot. New York based filmmaker Laura Poitras deserves a medal for her lone achievement in getting so truthfully close to tragic events that could have taken her life.

Two great widescreen features share my history-epic 'award'. Deepa Mehta's Water, the third in her Indian trilogy and the best, took five years to make after death threats from Hindu fundamentalists and had to relocate its shoot to Sri Lanka. Set in 1938 amidst the rising tide of nationalism it addresses the plight of Hindu widows forbidden by religious custom to remarry and forced into a stigmatic house of widows: the tragic love story which follows, while richly romantic in Indian epic style sticks close to the harrowing detail of female exclusion. Andrucha Waddington's Brazilian House of Sand also foregrounds female perspective, treating mother-daughter relations over three generations from 1910 to 1970s in the forbidding but mesmerising sand dunes of Maranhão, from first settlement to 'civilised' living. Its ambitious scope and stunning photography successfully blend a family's struggle for survival against the harshness of nature with a wider allegory of the founding of a nation.

On the Chinese front Lou Ye's ambitious rites of passage film Summer Palace had its UK Premiere straight from Cannes but seems too long and lacking in focus to do itself justice. Perhaps a sharp re-edit and a sharp change of heart by the Chinese censors will get it the massive Chinese audience who would clearly respond to it. A more poignant, precise sketch of 1980s China came in Li Yu's Dam Street set atmospherically in a small riverside town and dealing through its family secrets much more effectively, and emotionally, with the cultural tensions of the time.

Apart from Summer 04 the other film on view to treat squarely with death and the dilemmas that ensue was Ray Lawrence's Jindabyne beautifully shot in the Australian National Park of that name and framed around the discovery of a murdered aboriginal girl by a group of amateur fishermen who decide not to let the floating corpse spoil their sporting weekend. They must then live with the destructive fall-out from their wrong decision, and here Gabriel Byrne and Laura Linney give standout performances. Both these films refuse to take the easy way out, a courage that a pair of the same ilk getting five star ratings here, sadly lacked. London to Brighton (Paul Andrew Williams) and The Aura (Fabián Belinsky) powerfully highlight the existential impasse of desperate protagonists in their first blistering hour – only to lurch sideways into the fake solution of gangster cliché. A great pity that two such promising films fell short, but a pity too that so many critics fell short by failing to acknowledge it.

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