Director Ari Folman was a soldier in the Israeli army when it invaded Lebanon that year. The army allowed Lebanese Christian militiamen into Palestinian refugee camps in Lebanon, who then went on a killing spree.
The film is up against another animated picture, "Persepolis," an adaptation of Marjane Satrapi's popular comic book telling of her life growing up in Iran, and "Gomorrah," a hard-hitting film about the Naples mafia.
Rounding off the "film not in the English language category" are "The Baader Meinhof Complex," about left-wing militants suspected of killing dozens of prominent Germans, and "I've Loved You So Long," a family saga starring Kristin Scott Thomas.
The main BAFTA nominations announcement will be made on January 15, but organizers said they wanted to give voting members of the British Academy of Film and Television Arts more time to view the foreign movies in contention.
The 2008 winner of the foreign language film award was German entry "The Lives of Others," about a Stasi secret police officer in East Berlin who develops feelings for his victims while spying on them.
The BAFTA awards ceremony, closely watched in the run up to the Oscars in late February, will be held in London on February 8.