Six hundred meters from the Croisette lies a community of French Muslims who remained largely invisible until their mosque briefly became the unwitting base for one of the most dangerous terrorist cells in French history: Festivalgoers "have no idea of what's really going on here."

Thirty-seven years ago, at the age of 32, Moustapha Dali quit show business. An Algeria native, he'd begun to build an acting career in France but tired of his Paris agents telling him he'd have to change his name to one "less Arabic, more French." As Dali recounts it, "I told them I wanted to keep my name. I said Omar Sharif didn't change his name, but they said, 'He's not a French actor, he works in Hollywood.' "

Today, at age 69, the scholarly, erudite Dali is the soft-spoken but righteous rector of the Mosquee Al Madina, the main mosque in Cannes, which sits above the Croisette, just 600 meters from the Palais des Festivals. Although he once dreamed of being in their company, Dali watches the annual influx of movie stars descending on the Croisette "as if they are a bunch of martians landing. We're so near, but I know they have no idea of what's really going on here."

Dali inhabits another world, one far removed from the festival's red carpets, swank parties and luxury suite wheeling-dealing: Instead, he lives on the front lines of France's increasingly explosive relationship with its more than 5 million Muslim residents. His mosque was used — without his knowledge, he says — in 2012 as a rendezvous point for one of the most dangerous terrorist cells in French history. And in late 2015, his mosque's imam, or prayer leader, was rousted from his home in the early hours of the morning, accused of encouraging radicalism and told he no longer could work there — although the charge later was dropped and the young man received an apology.

While relations between France and its Muslim population long have been tense, the tension has escalated as the Cannes Film Festival gets underway amid heightened security in the wake of terrorist bombings in Paris and Brussels. Recent reports from Senegal via Italian intelligence warned of possible terrorist attacks on beaches in the South of France and Italy, raising the specter of small bombs, planted under deck chairs and hidden inside cans of energy drinks, just waiting to detonate.

A jacked-up, worst-case scenario? Maybe, but in February 2014, a onetime Cannes beach attendant was arrested just outside town, two days before the start of the annual carnival in neighboring Nice, where police believe he was planning an attack inspired by the Boston Marathon bombings. Fatima Azzaz, a terrorism specialist with the Paris police, tells THR that "anyone who says they know who will get hit next is lying." She adds, "The South of France is vulnerable; everyone knows that."

A woman with a placard reading “Enough dead people” took part in a march ?in support of migrants as part of the European Day of Action on Sept. 12 in Nice.

Actually, everyone doesn't know that. French anti-terrorism officials and many French media outlets, especially tourist-driven local papers like the Nice-Matin, have been cagey about reporting the details of terror cells like the so-called Cannes-Torcy gang, a 22-member jihadi cell with ties to ISIS in Syria that attacked a Jewish grocery in the Paris suburb of Sarcelles in 2012.

Consider the case of Algeria-born Cannes resident Ibrahim Boudina, 23, who was part of the Cannes-Torcy cell. In 2013, he and two others escaped to Syria, according to French intelligence. He returned to France in early 2014. He first was detected crossing the Greek border but was let go — even though he had $1,700 in cash and a USB drive containing a document titled "How to Make Bombs in the Name of Allah" — because there was no warrant for his arrest in Europe. Shortly thereafter, he was arrested at his father's high-rise apartment outside Cannes, where he was found with three Red Bull cans containing TATP explosives and wigs and disguises thought to be part of his plan to stage the carnival attack. But the arrest was not reported until 10 months later, in November 2014.

If the authorities, as well as the local media, downplay such events, it's because they are in stark contrast to the glamorous image of the Cote d'Azur. But the glittery Mediterranean coastal towns long have had a very unsexy dark side — one that goes far beyond their cultivated reputation for high-priced hookers, nimble jewel thieves and suave cat burglars. It's a place where the "Lost Generation" no longer means artists and writers like Picasso and F. Scott Fitzgerald but rather the disaffected third- and fourth-generation children of Algerian immigrants, including some whose great-grandfathers immigrated to France before 1952, when they still were referred to as colonial "subjects" and weren't permitted citizenship. Others, like Boudina, are first-generation Algerian immigrants.

Because of the fear created by ISIS, it's also a place that's rapidly turning into what one local calls a "second Vichy," a return to the Cote d'Azur's dark days during the German occupation in World War II when Nazis and their French collaborators hunted Jews, aided by the hallowed French tradition of telling on, or "denouncing," one's neighbors. Except the dimes now being dropped are being dropped on Muslims, not Jews.

As a result, a fair percentage of the service people in and around Cannes — the cooks, truck drivers, gardeners, dishwashers and others with North African surnames — probably are on the dreaded "fiches S," or S-files, the list French officials keep of those suspected of being a danger to the republic. Since President Francois Hollande declared a state of emergency in November, teams of police officers have knocked on the doors of more than 4,000 homes in France, mainly belonging to those whose names draw suspicion. The raids usually come just after 8:30 a.m. The police don't need a warrant and often will turn a home upside down looking for incriminating evidence. Residents are told to stop work and report to the police station once a day.

The kosher grocery in Sarcelles that was attacked by members of the Cannes-Torcy terrorist cell in 2012.

While some defend the raids as the preemptive police work required to prevent another explosion in an airport, concert hall or sidewalk cafe, others argue that the measures are punitive and designed to further stigmatize a particular class of people — French Muslims of North African descent — who already were treated like second-class citizens well before anyone had heard of ISIS.

Unlike in the U.S., racism long has been a taboo topic in France. French Muslims have never had a national leader with the stature of a Martin Luther King, and so they have tended to internalize their mistreatment at the hands of the so-called Francais de souche, or pure-blood French. But for anyone with a North African surname, it's often impossible to rent an apartment anywhere in France and difficult to find a job — and that was as true before 9/11 as it is now. Still, just two or three blocks from the Croisette and a few steps beyond the main tram stops in Nice, there exists an almost parallel universe, Muslim communities in which women wearing head scarves go about their business as they push their children in strollers. The majority of those French Muslims are as repulsed by radical Islam as anyone else. Karim, a 21-year-old Muslim leader in Nice's Ariane ghetto who declined to provide his surname, calls the terrorists now spreading media-fueled fear throughout Europe, "a criminal gang of drug dealers and juvenile delinquents who have nothing to do with the real Islam."

Fresh from an anti-ISIS conference near Milan, he thrusts a bunch of battered pamphlets upon his visitor while we talk over coffee at a Turkish cafe. Translated from French, they have titles like "DAECH [an alternative name for ISIS]: The Satanic Jihad" and "How to Fight DAECH by Spreading Authentic Islam." But Karim acknowledges that he and his friends face an uphill battle.

He lives not far from Cite, a banlieue (French for "suburb") where former career criminal Omar Diaby grew up and had the dubious distinction of being France's prime recruiter of young French fighters for Syria before he was killed in Syria in 2015.

"Everyone in our communities knows each other," says Karim. "We know who's getting recruited. They don't go after people like me, who know Islam. They go after the kids who are the drug dealers and the car thieves. This isn't about religion, and it isn't about Islam. It's about a criminal Mafia making Muslims look bad around the world."

They have succeeded in that, for as Philippe Capon, the head of UNSA, France's police organization, tells THR, there is a "growing problem that a lot of French people think all Muslims are potential terrorists. I know they're not, but it's not enough for people like me to know it. French Muslims lack a charismatic leader, a Mandela who could help make these distinctions. It's very hard to get past all this prejudice without an organized effort."

Capon, head? of UNSA, France’s police organization, following an April 12 meeting at the Elysee presidential palace in Paris. He tells THR: “A lot of French people think all Muslims are potential terrorists.”

Dali, in an interview at his mosque, states it even more starkly. "I know what's going on behind the curtain," he says. "Fascism is back in France. You don't like someone? Just call the police anonymously and tell on them." When he built his mosque in 1998, he explains, he never could have imagined that one day it would be, erroneously, he says, described as a place where young Algerian-French terrorists were "radicalized." But that's what happened. And Dali is furious and fighting back.

Dali's nightmare began in 2012, when a group of young men that included Boudina arrived in Cannes in a camper van and parked it in front of the Mosquee Al Madina for 40 days during the holy month of Ramadan. The men entered the mosque to pray on only a few occasions and began to act menacingly toward Dali when he told them it was time to close. Dali had no idea that some of the young men were being watched by the authorities, although he did wonder why their camper van never was told to move since the mosque is in central Cannes, where parking is scarce and expensive. Even odder, the police had a camera positioned near the van, so they had to know it was parked illegally much of the time, says Dali.

When he found out much later through news reports that the men were part of the dangerous Cannes-Torcy terrorist cell, Dali was enraged and wrote an angry note to the RG, France's version of the FBI. "I asked them, how could you leave me a hostage there all that time when you knew who these guys were?" says Dali. The RG responded, in Dali's account, by telling him his letter was "rude."

"They were setting me up," he says. "Those young men weren't parked at my mosque to pray. They were using it as a base because it was easier than going into a cafe or someone's apartment. Ever since then, you'll read that they were 'radicalized' at this mosque. That's a lie. We don't do that here."

Dali says his mosque includes "Muslims of all ages and types. Normal people of all ages, they could be Catholics or Protestants. We're right in the center of town, totally transparent. We have no interest in radical Islam. It's absurd, but it's a way for France to make Muslims the problem and take the focus off all the economic problems in this country."

It got worse late in 2015: Afif Lattar, a 32-year-old Franco-Algerian, who served as the imam at the mosque, was at home with his young family when French police burst in at 8 a.m. one morning. After searching his home, they told him he no longer could work at the Cannes mosque or even enter it or other local mosques because he was suspected of encouraging radicalism. Lattar fought the ban at court in Nice and won a judgment of 1,000 euros, an apology and a reversal of the decision. Dali invited him back to the Al Madina mosque, but Lattar said he wanted to take time off and return to his hometown of Toulouse. His wife, he told Dali, was "traumatized" by the whole incident.

Though Dali's story checks out in interviews with members of the Cannes mosque as well as various French officials in the region, it was difficult to confirm with Cannes police. A woman who answered the police switchboard was vague about when the officer in charge of media relations would be in the office and said all reporters must come down to the station personally to track him down. "You mean even if you're a reporter in Paris or New York you have to fly to Cannes to make an appointment in person?" she was asked. She said yes and hung up. The Hollywood Reporter visited the police station the next day. The officer was not there.

This story first appeared in the May 13 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.