I watched this movie trailer, and wondered at first if it was a low-budget indie movie. Then, once the trailer revealed its premise, I thought it was a put-on. Like Christopher Guest doing a "Best in Show" take on the war in Iraq. (Warning: graphic images in the trailer)
Turns out, this is a straight ahead documentary.
There really is a fake town in the Mojave Desert where the military pays Iraqi refugees to play the part of Iraqi police and insurgents so that the army can conduct war games, complete with fake explosions and movie make up and funerals.
J. Hoberman's review in the Village Voice
David Edelstein in New York magazine