Update - 14 September 2012: The anti-Islam film was originally reported by the Associated Press news agency to have been written, directed and produced by an Israeli real estate developer living in California, Sam Bacile. Later reports by AP suggested that this was a fake identity and the news agency, having investigated further, subsequently issued a fresh story, as well as a correction, tracing the genesis of the film to a Coptic Christian, Nakoula Basseley Nakoula, living in California.

An Israeli film-maker based in California has gone into hiding after his film attacking the prophet Muhammad sparked angry assaults by ultra-conservative Muslims on US missions in Egypt and Libya, claiming the life of one American.

Speaking by phone from an undisclosed location, the writer and director Sam Bacile remained defiant, describing Islam as "a cancer". The 56-year-old said he had intended his film to be a provocative political statement condemning the religion.

Protesters angered by Bacile's film on Tuesday opened fire on, and burned down, the US consulate in the eastern Libyan city of Benghazi, killing a US diplomat. In Egypt, protesters scaled the walls of the US embassy in Cairo and replaced an American flag with an Islamic banner.

"This is a political movie," said Bacile. "The US lost a lot of money and a lot of people in wars in Iraq and Afghanistan, but we're fighting with ideas."

Bacile, a California property developer who identifies himself as an Israeli Jew, said he believed the movie would help his native land by exposing Islam's flaws to the world.

"Islam is a cancer, period," he said repeatedly.

The two-hour movie, Innocence of Muslims, cost $5m (£3.1m) to make and was financed with the help of more than 100 Jewish donors, said Bacile, who wrote and directed it.

The film claims Muhammad was a fraud. An English-language 13-minute trailer on YouTube shows an amateur cast performing a wooden dialogue of insults disguised as revelations about Muhammad, whose obedient followers are presented as a cadre of goons.

It depicts Muhammad as a feckless philanderer who approved of child sexual abuse.

Muslims find it offensive to depict Muhammad in any manner, let alone insultingly. A Danish newspaper's publication in 2005 of 12 caricatures of the prophet triggered riots in many Muslim countries.

Though Bacile said he felt sorry about the death of the American who was killed in the outrage over his film, he blamed lax embassy security and the perpetrators of the violence.

"I feel the security system [at the embassies] is no good," said Bacile. "America should do something to change it."

A consultant on the film, Steve Klein, said the film-maker was concerned for family members who lived in Egypt. Bacile declined to confirm this.

Klein said he had vowed to help Bacile make the movie but warned him: "You're going to be the next Theo van Gogh." Van Gogh was a Dutch film-maker killed by a Muslim extremist in 2004 after making a film that was perceived as insulting to Islam.

"We went into this knowing this was probably going to happen," Klein said.

Bacile's film was dubbed into Egyptian Arabic by someone unknown to him. The film-maker speaks enough Arabic, however, to confirm that the translation is accurate. The film was made in three months in the summer of 2011, with 59 actors and about 45 people behind the camera.

The full film had been shown once, to a mostly empty cinema in Hollywood, earlier this year, Bacile said.

• This article was amended on 21 December 2012. The original headline described the film-maker as an Israeli. This was a self-description given to AP by the man posing under the name Sam Bacile. He was later revealed to be Nakoula Basseley Nakoula, believed to be an Egyptian-American Coptic Christian. The headline has been amended to avoid misunderstanding in search results.