I had a sense of what to expect from Green Zone because I had seen director Paul Greengrass's 2002 Bloody Sunday as well as his Bourne films. In Greengrass's version of the 1972 incident in Ulster, he implies that the killings were a deliberate massacre by the British Army - even inventing a sinister posh-voiced general who tells the Paras it is time to teach the Fenians a lesson.

His latest is a thriller "inspired" by the bestselling but smug and dishonest book Imperial Life in the Emerald City by Rajiv Chandrasekaran, a Washington Post journalist with a soft spot for Arab nationalism. Scripted by Brian Helgeland, Green Zone is set in the first months after the arrival of Coalition troops in Baghdad in 2003 and is essentially attempt to shoehorn a crude but popular conspiracy theory about the Iraq war into a compelling action drama. It stars Matt Damon as Weaver, the leader of a small team of specialist soldiers assigned to look for WMDs in the newly conquered country. When no WMDs are found, Weaver gets suspicious and starts questioning the intelligence on which his mission is based.

In no time he cuts free of the chain of command and connects with a top journalist (Amy Ryan) who was fed false information by a Bush administration official, a skeptical CIA agent (Brendan Gleeson, sounding very Irish), the malevolent Bush appointee, Poundstone (Greg Kinnear), who has masterminded the entire conspiracy and is now running Iraq, as well as a pair of Iraqis who have knowledge of the alleged secret source of WMD intelligence.

Kinnear's evil, lying neocon has his own Praetorian Guard of brutal special forces soldiers led by Jason Isaacs whom he sends out to frustrate Weaver's investigation and to kill off his sources.

Besides Damon's supersoldier, the good guys are the CIA who understand that the right thing in Iraq is to give power to a top Baathist general. Without the strong arm of the general and the Republican Guard, the country will collapse into insurgency and civil war.

Unfortunately the evil, lying neocon has foolish and naïve notions of bringing in democracy - or installing an Ahmed Chalabi-like politician - it is not clear which. Moreover he is willing to have Bourne's character hunted down and killed by his henchmen.

As someone who was actually reporting from Iraq at the time the film was set I can vouch for Green Zone's visual accuracy. Greengrass somehow combines computer-generated images of Baghdad with footage shot in Spain and Morocco to create settings that are almost all exactly, extraordinarily right. Almost every small detail - uniforms, weapons even military language - is spot on. It is the big picture that is ignorant and wrong, and spectacularly so.

Greengrass is a terrific action director and the film crackles with energy notwithstanding the insulting stupidities of the plot. Green Zone is a well-crafted and fast moving vehicle for a big lie.

It is perhaps a mercy that Poundstone is not made explicitly Jewish, though the film is so steeped in conspiratorial nonsense of a certain stripe that you can easily imagine the next project of the team behind it to be an exposé of Zionists aiding the Holocaust to bring about the state of Israel.