The four-day festival, organized by local audio and visual productions company Ruwaad Media, includes 28 short films and documentaries from Saudi and other Gulf countries, and takes place in the Jeddah Chamber of Commerce.
Jeddah's mayor, Adel al-Fagih, was cautious in his opening statement: 'We hope this will be the beginning of creative and entertaining communications in harmony with the values and understandings of our society.'
Last year, the Saudi authorities allowed limited public screenings of animated films to women and children but cinemas have been closed in the Kingdom since the 1970s, a casualty of creeping religious and social conservatism.
The films showing in Jeddah include a 45-minute documentary, Women Without Shadows (2005), by Haifa Al-Mansour, whose short The Only Way Out, exploring the options open to young Gulf men, had international festival play in 2003.
The programme also includes new shorts by local filmmakers Ali Al-Amir and Saeed Al-Marri. Festival director Mamdouh Salem's documentary Full Moon Night (Laylat Badr), about traditional life in the Jeddah region, has proved particularly popular.
Al-Mansour's first feature, Wajda, is in development, produced by Rotana, the Saudi media conglomerate owned by Prince Al-Waleed. Ayman Halawani, head of film production, told ScreenDaily.com that Wajda could be the first film shot in Saudi Arabia.
Rotana's first Saudi feature, How are you' (Keif Al Hal), 2006, was shot in Dubai.
With a population of 27m, 45% of whom are under 18, Saudi is the most lucrative satellite TV market in the Gulf, and if and when cinemas reopen, could be a potential goldmine for distributors.
Saudi filmmakers and critics say that 'private' screenings in coffee shops and arts clubs are multiplying in capital Riyadh and the more liberal coastal city of Jeddah.
Some developers have been confident enough to prepare space for cinemas in new shopping malls. 'The country is modernizing rapidly under King Abdullah,' says Halawani. 'I'm confident that there will be cinemas, but am just not sure when.'
But distributors caution that there's a long way to go. The hassle and expense of producing DVDs censored specifically for the Saudi market mean that they currently only attempt to release animation and the most conservative of features. ' DVD piracy is rife,' says Gianluca Chacra of Dubai-based Frontrow Entertainment. 'The market would be huge, if it opens up, but it will be a slow process, and would need government encouragement and support.'