In this film publicity image released by Sony Pictures Classics, Leonard Proxauf is shown in a scene from, 'The White Ribbon.' The film was nominated Tuesday, Feb. 2, 2010 for an Oscar for best foreign picture. The 82nd Academy Awards will be presented on March 7. [Agencies]?

PARIS – Germany's award-winning "The White Ribbon," which took the top prize at Cannes last year, will compete with another prize winner, the melancholy Peruvian drama "Milk of Sorrow," and three other films from Israel, Argentina and France for the Oscar for best foreign language film.

Set in pre-World War I Germany, "The White Ribbon" is a stark black-and-white morality tale examining communal guilt, distrust and punishment among the residents of a small town.

Its director, Michael Haneke, is an art house favorite whose past films, including "Cache," "The Piano Teacher" and "Funny Games," have racked up string of awards in Europe and beyond.

"The White Ribbon" won the Golden Globe for best foreign movie and is in contention — along with the French nominee, "Un Prophete" — for Britain's BAFTA awards.

Haneke — who holds Austrian citizenship — declined media requests for comment, but the film's producer, Stefan Arndt, called Tuesday's nomination "smashingly awesome."

"I still don't know what to say," he told The Associated Press in a phone interview. "I didn't even expect this to happen in my dreams."

Arndt added he was thrilled the movie also scored a nomination for best cinematography, with lead cameraman Austrian Christian Berger in contention for the prize.

Young Peruvian director Claudia Llosa's "Milk of Sorrow," which won the Golden Bear at last year's Berlin Film Festival, addresses the lingering problems of women abused during the Peruvian government's decades-long war against leftist guerrillas. It is the first Peruvian film ever to be nominated for the foreign-language film Oscar.

The film, called "La Teta Asustada" in Spanish, stars striking actress Magaly Solier as Fausta, a young woman suffering from a mysterious illness that according to popular legend is transmitted through the milk of mothers who were raped during the conflict.

Solier said she had been cultivating her little plot of land in her native city of Huanta, in central Peru, just before she heard the news.

"I jumped up and down like a crazy woman, I was so excited," the 23-year-old actress told Radioprogramas radio. "I'm going to wait until this knot in my throat goes away and then I'm going to thank everyone, starting with my mother ... to every last person who supported me."

Solier also starred in Llosa's first movie, "Madeinusa," after the director discovered her while she was selling lottery tickets for a school trip.

Llosa said she was "very, very happy" about the nomination.

"We screamed until we lost our voices, and we keep getting calls of congratulations, of happiness and everything, from a thousand people," the 33-year-old director told Radioprogramas.

Another South American feature, "El Secreto de Sus Ojos," ("The Secret in their Eyes") by Argentine director Juan Jose Campanella, is the story of a detective who plunges into a cold murder case.

Campanella, whose "Son of the Bride" was nominated for an Oscar in 2002, told Argentine cable channel Todo Noticias he was stunned by Tuesday's news.

"I cannot believe it," he told the channel in Spanish. "You go through the process with so much anxiety that when it happens the news is a relief."

Newcomers Scandar Copti and Yaron Shani's "Ajami" depicts the brutal life of drugs, violence and poverty in a mixed, Jewish-Arab neighborhood in the Mediterranean city of Jaffa.

Copti — an Israeli Arab who co-directed the film with Shani, a Jew — said he hoped the film would help spread awareness about Israel's Arab minority, which makes up about one-fifth of Israel's population of 7 million.

"Maybe with the nomination, people will have a chance to understand what a Palestinian living in Israel is," Copti told The AP in a phone interview from Dubai. "It will put us on the map."

Acclaimed French director Jacques Audiard's "Un Prophete" ("A Prophet") scored the second-place prize at last year's Cannes Film Festival.

"I think of all these actors, all of the directors who have been in this same place, all of those lovely people who have made me dream and want to do what I do today and, in many respects, brought meaning to my life. So what am I feeling? In short, immense gratitude." Audiard said.

A gritty prison drama, "Un Prophete" chronicles the rise of an illiterate inmate who educates himself and becomes a player in drug and smuggling circles while serving a six-year sentence.

Its outsider hero is Malik, played by actor Tahar Rahim, a young Frenchman of North African origin who is sent to prison and forced to find a path between its rival gangs, including Muslim inmates and Corsican gangsters. Tense, brutal and sometimes tender, the film shows Malik's education on the rules of prison life, which turn out to be not so different from those outside.

Rahim garnered several prizes for best actor at smaller film festivals.

The movie's producer, Marco Cherki, called the nomination "good news for the future of the film," telling I-tele television the crew had high hopes going into the March 7 Academy Awards ceremony.

Audiard won international acclaim for his last feature, 2005's "The Beat That My Heart Skipped," the story of a young man torn between following in his father's footsteps in a life of thuggish petty crime and pursuing his love for classical music.

Last year, Japan's "Departures," a film about a classical musician who prepares bodies for burial, won the Oscar for best foreign language film in an upset over the favored "Waltz With Bashir," an Israeli animated documentary.

In recent years, the foreign language film nominating process has sparked widespread criticism as many critically acclaimed films and festival award winners have failed even to be nominated. Part of the problem has stemmed from the rule that limits each country to submitting only one film for consideration — which hurts international co-productions such as "The White Ribbon," as well as countries such as France and Italy with vibrant film industries.

The process of selecting the final nominees from the more than 60 films submitted by countries each year has been dominated by older and retired Academy members with less avant-garde tastes who have time to attend special theater screenings. But starting with last year's Oscars, the Academy set up a special executive panel to safeguard against glaring omissions on the nine-film shortlist from which the five final nominees are chosen by another committee.