It is there that historical truth and what Mossad says is Steven Spielberg's "film fantasy version" of that murderous attack in his film, Munich, diverge. Israel's intelligence service is infuriated with Spielberg's portrayal of its agents who hunted down the Black September terrorists who killed the Israeli athletes at the 1972 Munich Olympics. The Mossad hit team is portrayed as increasingly filled with doubt about the morality of its mission. Conversely, the terrorists are given a platform to rationalise their actions - much as the apologists for the suicide bombers today defend their atrocities.

It is this, more than the undoubted skills with which Spielberg weaves his story, which guarantees Munich, to be released in Australia on January 26, will continue to receive unprecedented fiery criticism from Mossad. One area of agreement between the filmmaker and Israel's spymasters is that the Black September terrorists died as violently as the code by which they lived. The first was shot dead in the lobby of his Rome apartment. There were 11 bullets - one for each Israeli athlete he helped to murder. Another terrorist died when he answered the phone in his Paris apartment. The bomb in the receiver blew off his head.

The next to die was expertly pushed under a London bus during peak hour; in Cyprus, a bomb exploded in a terrorist's bedside lamp. In all, 18 Black September terrorists would die. Hours before they died, each man's family received flowers and a condolence card bearing the same words: "A reminder we do not forget or forgive." After each death a notice appeared in Arab newspapers across the Middle East.

The flowers, cards and notices had all been sent by LAP, Mossad's department of psychological warfare. Spielberg portrays the hit team as merely responding to violence with violence. In reality, each execution was carefully planned by Mossad's "kidon" unit, its team of hand-picked, legally operating executioners. Some of the terrorists died in their beds, others in souks and alleys that had no names. As well as bombs, the kidon delivered vengeance from a silenced handgun, garrotting with a cheese-cutting wire or a knife thrust into a larynx. Sometimes they used nerve agents which smelled of newly mown grass or spring flowers.

It took two years to find and kill all the Black September terrorists involved in the Munich massacre. The operation became a legend within the global intelligence community. Spy chiefs from the CIA, MI6 and Europe's intelligence agencies sent their senior officers to Tel Aviv to study the debriefing reports of the eight kidon and their 80-strong support team.

I am one of the few outsiders who has seen the reports. They are more compelling than any thriller. In the film, the Mossad hit team is shown as working on its own, lonely and isolated "for the need to protect the operation". In reality, Mossad insists, each terrorist was tracked down by a large back-up team. The "sayanim" special unit which tracked the Palestine Liberation Organisation - of which the Black September terrorists were a splinter group - was ordered to find the Munich killers. The "yaholomin" technicians, Mossad's vaunted communications unit, set up eavesdropping equipment to monitor each terrorist as he was discovered. Another unit opened dead letter boxes in a dozen European capitals to receive messages from informers. Safe houses were rented for secret meetings in London, Paris and Madrid.

Vacuamer, the department that produced profiles of each terrorist, worked night and day to provide back-up. None of this is portrayed in Munich.

Missing, and most important of all, is Israel's well-established justification for hunting and executing terrorists who cannot be brought to trial by the usual means of arrest. This justification for killing was laid down by Meir Amit, the most innovative and ruthless director-general of Mossad: "There will be no killing of political leaders. There will be no killing of a terrorist's family unless they are also directly implicated in terrorism. Each execution must be properly sanctioned. This will ensure that any execution is therefore not state-sponsored murder, but the ultimate sanction by the state. The executioner is therefore no different from the state-appointed hangman or any other lawfully appointed executioner." Spielberg or his screenwriter, Tony Kushner, did not have access to the reports. If they had would it have changed their view of the hit team?

Mossad thinks not. It points to the fact the movie is based on a book, Vengeance by George Jonas, that it quickly dismissed as "pure fantasy" when it was published in 1984. In the book Jonas claims to "explore at first-hand the feelings and revulsion and doubt which gradually come to haunt each member of the Mossad hit team and which in the end inexorably changed their view of the mission and themselves".

He concluded that his story "will inspire and horrify. For its subject is an act of revenge that goes to the very heart of the ancient biblical questions of good and evil, or right and wrong, which ultimately remain the deepest concerns of the Jewish people and which continue to haunt 'Avner' and his comrades on their mission". All this is slavishly echoed in Munich. Its critics in Mossad have called this a blood libel on the men who never for a moment doubted the righteousness of what they did in the name of Israel. Those critics point out the very existence of "Avner", the leader of the hit team, is doubtful. Mossad insists it has no record of his existence apart from his depiction in Vengeance.

Ari Ben-Menashe, a one-time adviser on intelligence to the Israeli Government, says: "I never saw any file listing Avner." David Kimche, former deputy director of Mossad, said: "It is a tragedy that a person of the stature of Steven Spielberg, who has made such fantastic films, should have based his Munich film on a book that is a falsehood."

His stinging criticism came on the heels of a private viewing for senior Mossad personnel of the film in Tel Aviv. In the darkened cinema they sat first in silence and then a steady mounting murmured chorus of "it could never have happened like this" … "this is fantasy" … "this is pure fiction" … "this is history, Hollywood style". It is these judgements that have placed Munich in the same category for Mossad as blockbuster movies such as Oliver Stone's JFK. One of those at the private viewing was Meir Dagan, the head of Mossad. He told aides the millions who would see Munich would come away "with a seriously distorted view of the truth".

"Dagan felt Munich is more Indiana Jones than any semblance of reality," says one of his aides. "The hunting down of the Black September killers was a carefully controlled operation that involved a large number of people. The kidon had undergone weeks of studying their targets. Little of this appears in the film." THE $105 million film begins with the admission that it is "inspired by real events". The opening sequences include news footage of the massacre of the athletes, the helpless Olympic committee, the hapless Munich police and the final shoot-out between the Black September terrorists and untrained German marksmen neither equipped with proper sniper rifles nor telescopic sights. For the next 145 minutes the film focuses on Mossad's hunt for the killers who escaped.

Avi Dichter, a former head of Shin Bet, Israel's internal intelligence service, called the film "a children's adventure story. There is no comparison between what you see in the movie and how it works in reality." A former Mossad officer, Victor Ostrovsky, said it was "pure fantasy" to have Israel's then prime minister, Golda Meir, personally recruiting the hero Avner to lead the team. "That could never have happened. Yet it is one of the many nonsensical claims made in the movie." Spielberg shows a hit team isolated in the field for months and includes a forger and bomb-maker so it can operate alone.

"Absolute rubbish" was Dagan's reaction to the film. Rafi Eitan, the former Mossad operations chief at the time of the Munich massacre, once said it was "standard practice" for female agents to be part of the team. Having a woman on hand often helps to get closer to a target. But there are no women in the movie's hit team.

Michael Bar-Zohar, an Israeli intelligence expert, said Spielberg's film has the team hunting down 11 terrorists. "He's just giving it an overly moral symmetry to match the number of athletes killed at Munich," he says. But what infuriates Mossad most is the film's presentation of the hit team increasingly questioning the morality of its actions. "It never happened. It could never happen. The men chosen for the mission were hand-picked for their mental stability. Like all kidon they had undergone intense evaluation by Mossad psychologists before they were sent on the mission," says a serving Mossad officer.

For Mossad the film partly stands or falls on the scene where Golda Meir personally recruits Avner. She is now dead. But there are two men present when the mysterious Avner is persuaded by Meir to lead the team to hunt down the Black September terrorists. One was Zvi Zamir, then the head of Mossad. The other was Ariel Sharon, today the ailing prime minister of Israel. Neither has commented on the film. Express Syndication/Picture Media

Gordon Thomas is the author of 53 books including the bestseller Gideon's Spies: The Secret History of the Mossad.