Italy's state-owned ditribution outfit, Istituto Luce, has bought local distribution rights to Babak Payami's hard-laboured Upstream title, Silence Between Two Thoughts, which the director managed to smuggle out of Iran after local authorities had confiscated his 35mm film.

"My film's negative was confiscated by Iranian authorities, and it was a hard and stressful to prepare a new special version," said Payami, whose film screened in Venice on a digital beta tape.

Silence Between Two Thoughts focuses on a young woman in an Iranian village who has been sentenced to death. She is saved, however, on the premise that those who commit a crime go to hell, but a virgin will go to paradise. To prevent this, the village's spiritual guide condemns the woman to marry her future executioner.

"My film is about those who are controlled by religion. My intention is to offer a human vision of a tragic and violent situation, showing how religion can give way to injustice and misunderstanding. It happened in the Middle Ages, it happened with the Taliban, and even in Waco, Texas. It's a theme that is as ancient as man himself," explained Payami.

Payami, who won Venice's Golden Lion in 2001 for Secret Ballot, wrote, produced and directed the film.

Meanwhile, Istituto Luce is pressing ahead with production on its fast-expanding international slate, which includes Michael Radford's Merchant Of Venice and Modigliani.

Merchant Of Venice is due to start shooting on September 10 in Luxembourg, where they have built a complete reconstruction of Venice, Istituto Luce chief executive Luciano Sovena told

The $30m picture is produced by Cary Brokaw's Avenue Pictures, Matrix Film Finance, Baker Street Finance, Luxembourg's Delux Prods, Istituto Luce, and Italy's Immagine Cinema and Dania Film.

Starring Al Pacino in the title role, it is written and directed by Il Postino's Michael Radford.

Sovena said Joseph Fiennes and Cate Blanchett are currently in negotiations to star in the film.

Luce is currently also in post-production on Andy Garcia vehicle Modigliani. The $12m film is written and directed by Mick Davis, and produced by Bauer Martinez Studios. It tells the story of the last days in the life of the famous Italian artist as well as the bitter rivalry between him and Picasso.

Luce has a 20% stake in the production, which also stars Elsa Zylberstein, Omid Djalili, Eva Herzigova, Miriam Margolyes and Susie Amy. Luce, which is co-producing alongside Rome's R&C Produzioni, also owns Italian distribution rights to the picture.

Luce's new production slate also includes Cachet, the new film by Austrian director Michael Haneke.