Of the directors who transformed Hollywood in the ’70s, Steven Spielberg has made both the most successful and the most simplistic movies. Typically, they’re all spectacle and sentiment, with more attention paid to production design than dialogue. As a liberal Jewish American, Spielberg has allowed himself films about the Holocaust, African-American slavery, and “the Greatest Generation.” But with Schindler’s List, Amistad, and Saving Private Ryan accomplished, the director has returned to overblown genre pictures (War of the Worlds) and overinflated anecdotes (Catch Me If You Can, The Terminal). At this point, the last thing anyone could have reasonably expected from him is a film that’s not only serious but also complex.

Thus Munich comes as a major surprise, and not just because it was made behind a veil of secrecy. It’s not quite a great film, but it’s certainly Spielberg’s best, and one that validates the director’s many claims over the years to appreciate something other than Hollywood fare. A morally tangled account of an off-the-books Israeli campaign to kill Palestinian terrorists, Munich has more mood than drive, and even draws on the uneasy vibe of the mid-’70s American cinema that Jaws helped kill off. Cinematographer Janusz Kaminski’s harsh tones and zoom-lens shots evoke the looking-over-your-shoulder paranoia of Chinatown, The French Connection, and All the President’s Men.

The movie also has many European precedents, from Costa-Gavras’ political thrillers to today’s whip-smart French cinema. Munich embraces the latter by casting actor-directors Mathieu Kassovitz and Yvan Attal, as well as the actor who practically embodies French film’s newest wave, Mathieu Amalric. (Watching Amalric stroll into the Spielbergian frame is as delightfully startling as learning that Jean-Luc Godard has been signed to direct the new Tom Hanks flick.) The movie even invokes recent Israeli and Palestinian films that challenge Israel’s occupation policies by giving a small role to Hiam Abbass, who appears in both Paradise Now and The Syrian Bride.

Munich begins with an event observed by an entire generation of TV watchers: the ultimately fatal assault on 11 Jewish athletes and coaches at the 1972 Summer Olympics, an outrage committed by a Palestinian group calling itself Black September and abetted by the incompetence of German officials. Spielberg dispenses quickly with this prologue—although he will return to it—to introduce Israeli Prime Minister Golda Meir (Lynn Cohen) and two men who’ll put a new policy into effect. Young Mossad agent Avner Kauffman (Eric Bana) is briefed on the assignment by blunt, crusty handler Ephraim (Geoffrey Rush), and then set loose. He must find and kill—a life for a life—11 Palestinians who are supposedly involved in terrorism, without guidance from Israeli intelligence. All he gets is an unlimited expense account and four accomplices: driver and killer Steve (Daniel Craig), forger Hans (Hanns Zischler), cleanup expert Carl (Ciarán Hinds), and bomb maker Robert (Kassovitz), who never quite sets the charges right. Their languages are English, German, and French, which should be sufficient, given that the men are supposed to work only in Europe, avoiding the Arab world—a directive they eventually disobey.

Finding targets proves easy, especially after Avner makes contact with debonair Parisian information peddler Louis (Amalric) and his papa (Michael Lonsdale), a French Resistance veteran who disdains all governments. As the operation continues, however, all of Avner’s team members except the ruthlessly focused Steve begin to doubt their mission. They observe, meet, and sometimes converse with the people they are about to kill, and wonder whether these potential victims are really implicated in the Munich murders or—even if guilty—they should be summarily executed without a trial. (In fact, one of the hits fictionalized in the film, of a Palestinian translator rubbed out in Rome, is now considered to have been a mistake.) “We can’t afford to be decent anymore,” Avner tells a doubter, but even the team leader is weary of killing and misses his wife (Ayelet Zurer) and their newborn daughter. And conscience isn’t the only danger: As their exploits become better known, the five assassins become targets themselves.

Munich is derived from interviews with the man who inspired Avner, as well as from George Jonas’ Vengeance: The True Story of an Israeli Counter-Terrorist Team, a book whose reliability has been questioned. The film shouldn’t be mistaken for history, but its fundamental conundrum—the self-perpetuating cycle of Palestinian attacks and Israeli reprisals—is authentic enough. Yet what distinguishes it from other Spielberg efforts is not realism but range and depth. Tony Kushner—who shares the script credit with Forrest Gump screenwriter Eric Roth, author of an earlier version—has written the sort of honed dialogue never before heard in the director’s films. There are didactic scenes that fail to convince, such as one in which a Palestinian debates his people’s plight with Avner, who’s posing as a member of Germany’s ultraleft Red Army Faction. (No member of the RAF, which used to train in Palestinian camps, would have offered even a tentative defense of Israel.) But the missteps are balanced by moments of both warmth and wit. When the undercover Israeli agents battle four unaware Palestinians for control of a safe-house radio, for example, the whole group ends up agreeing on a soundtrack to peaceful coexistence: Al Green.

According to Time magazine’s eight-page account of the making of the film, Kushner didn’t just provide literate lines: He also served essentially as co-director for the scenes that were heavier on dialogue than on gunplay or explosions. Nearly all filmmaking is collaborative, of course, and it’s frequently impossible to tell just how a movie came to be. Perhaps Munich feels more sophisticated than other Spielberg pictures simply because it employs such actors as Craig, Rush, and Amalric instead of the glossy, veneer-thin movie stars the director usually favors. Even Bana, last seen flailing helplessly against the CGI in Troy and The Hulk, here seems fully human, a volatile blend of anger and remorse, duty and self-interest.

Spielberg’s worst idea was to interject brief flashbacks to the Munich debacle throughout the film, as if to repeatedly remind viewers that the Israelis didn’t start this particular battle. This culminates in a sequence that cuts between the slaughter of the Olympic athletes and a couple making love, leading crassly to a literal climax. Such episodes indicate that the sensibility responsible for Jaws is still at work, however tempered by subsequent experience. Still, this is the director’s most grown-up movie, and not just because it features French actors, pubic hair, and an unusually low-key John Williams score. It’s an acknowledgment of ambiguity and intractability, as well as an implicit rejection of the child’s-eye outlook that used to be Spielberg’s formula for deliverance. The director may call Munich “a prayer for peace,” but it unflinchingly depicts a world in which such prayers go unanswered.