Uncanny timing for an uncanny tale of Israeli-Palestinian history returning to haunt the present; in this case literally. This is a small-scale domestic drama with a supernatural tinge, set almost entirely in Jerusalem and Bethlehem and made by Palestinian film-maker Muayad Alayan, based on his own family history.

The story begins with Michael, a bereaved British-Jewish father (Johnny Harris), and his daughter Rebecca (Miley Locke) arriving in Jerusalem, looking for a new start after the death of their wife/mother in a car crash, a tragedy still fresh in both of their minds. They have inherited Michael’s father’s home: a grand old villa with plenty of light and space – not your classic haunted house. But Rebecca’s discovery of an old doll leads her to an encounter with Rasha, a pale young Palestinian girl about her own age, who apparently lives in the water tank in the garden, and whom no one else can see, not even Rebecca’s phone camera.

While Michael buries his grief in work, alienated Rebecca finds more solace in her semi-imaginary friend than in her new summer school. The grown-ups interpret her incomprehensible behaviour as unprocessed trauma and prescribe medication. But Rebecca’s attention is more on Rasha’s story, which leads her to the house’s history and ownership, and a Palestinian refugee camp in Bethlehem.

Grief, children and the supernatural are a familiar mix, and to be honest, there is little in the way of suspense or horror-adjacent here; the pacing is sometimes rather stolid. But the setting and the deeper roots of the story give it extra resonance and relevance, while the broader regional landscape of dispossession and intergenerational trauma are encapsulated with some subtlety and sensitivity – even if, as in real life, resolving such a story to the satisfaction of all parties is a challenge too far.

• A House in Jerusalem is in UK cinemas from 31 May.