With its beautiful horseshoe bay, old-town tapas bars and laid-back Basque atmosphere, San Sebastian is a popular industry stop-off on the festival circuit. Despite the increasingly busy autumn calendar, the 54-year-old event is this year expecting more than 1,700 delegates, plus a further 1,500 press and a smattering of international stars.

But the event is facing increased competition for world premieres.

"This year is the hardest we've had," admits San Sebastian festival director Mikel Olaciregui. "The number of festivals is growing and we are all running after the same movies. But I don't care too much about the world premieres. Some of the movies have already been presented at Toronto or Sundance, but they are European or international premieres at our festival and have not been presented outside of their country of origin."

While the event had 12 world premieres in official selection last year, there is just half that number this year. They include Korean costume thriller Shadows In The Palace and Michael Radford's closing film Flawless, screening out of competition. Other official selection entries screening in competition include John Sayles' Honeydripper, A Thousand Years Of Good Prayers from Wayne Wang and Nick Broomfield's Battle For Haditha.

Stars set to attend include Samuel L Jackson for the screening of Renny Harlin's Cleaner in San Sebastian's 3,000-seat Velodrome, Demi Moore for Flawless and Viggo Mortensen to promote David Cronenberg's Eastern Promises, which opens the festival.

Promoting Spanish-language cinema

San Sebastian is a champion for Spanish and Latin American talent. Spanish actor-writer-director Iciar Bollain returns to the competition, after 2003's Take My Eyes, with drama Mataharis while Spain's Gracia Querejeta is also in competition with Seven Billiards Tables, the story of a woman forced to rebuild her life after the death of her father.

"These two directors come with good reputations and I believe their films could be very well received and can help make the line-up look great," Olaciregui says.

There is also a wide range of Spanish-language titles competing in the Horizontes Latinos section and the completion funding initiative Films in Progress. The latter will see six Latin American projects compete for up to $40,000 worth of funding and technical support. Entries this year include The Dead Girl's Feast (A Festa Da Menina Morta), a Brazil-Argentina-Portugal co-production from first-time director Matheus Nachtergaele, star of films such as City Of God and Central Station; Federico Veiroj's Acne, a Uruguay-Argentina-Spain-Mexico co-production about an awkward teenage boy losing his virginity, and Julio Hernandez Cordon's Gasolina, a Guatemalan film that follows the exploits of three young boys who steal a can of gasoline.

"There are a lot of movies being made in Latin America thanks to the use of digital cameras, and now through the Films in Progress awards, and with the help of Spanish post-production companies, we can assist these film-makers in completing and showing their films," Olaciregui says.

Last year's Films in Progress award winners are also screening in the Horizontes Selection. They include Ana Katz's Argentinian film A Stray Girlfriend (Una Novia Errante), Luis Vera's Chilean political drama Fiestapatria and the taut relationship movie The Milky Way (A Via Lactea) by Brazilian film-maker Lina Chamie.

"It's very difficult to find funding for independent films in Brazil," says Chamie. "Films in Progress is proving vital for films like mine looking for completion funding and advice from the industry about gaining international recognition."

The success of the initiative has led to a joint arrangement between the Guadalajara and Toulouse film festivals, which both run their own Films in Progress schemes. Meanwhile San Sebastian has also created a spin off with Cinema in Motion, which provides funding and technical support to films from the Maghreb region of Northern Africa and Portuguese-speaking African countries.

FESTIVAL LOWDOWN

Official Selection jury

Paul Auster (chairman), Pernilla August, Nicoletta Braschi, Bahman Ghobadi, Eduardo Noriega, Susu Pecoraro, Peter Webber.

Awards

Official competition: Golden Shell, Special Jury Prize, Silver Shells for acting, directing.

Altadis new directors' award ($125,000).

Montblanc new screenwriters' award.

Donostia lifetime achievement awards (x2).

Films in Progress (Cine en Construccion) award.

Cinema in Motion.

Retrospectives

Henry King, Philippe Garrel.