The film, which is also the most expensive production made in Turkish film history, has quickly turned into a blockbuster, and over a quarter of a million people in Turkey and Germany have watched it since its release a week ago, Israel's leading newspaper Yedioth Ahronoth reported.
Last weekend, the number of viewers shot up from 60,000 to 260,000.
The film's plot revolves around a "Turkish Rambo" in Iraq, who seeks to take revenge against the arrest of a group of Turks by the Americans in Iraq.
It contains scenes of abuse and violence, carried out by actors playing U.S. soldiers against Iraqi civilians.
In one scene, an American Jewish doctor is seen removing kidneys from the bodies of Iraqis for implants in Israel and the U.S.
Makers of the film claim that the plot is based on "real events" in Iraq.
The Committee of Jewish Communities in Germany announced that those who support the screening of the film are encouraging hatred of Jews. Bavaria President Edmund Stoiber said the film could harm efforts to absorb Muslim immigrants into Germany, since it spreads hatred and lack of faith in the West, and plays into the hands of extremists.
Meanwhile, the Absorption Minister in North Rhein-Westphalia said that the film showed a crusade by Jews and Christians and Muslims, thereby spreading hatred and causing tensions between the religions
Sources in the Turkish community in Germany rejected the condemnations of the film and claimed that it was merely "anti-war," and accused right-wing politicians of encouraging a negative atmosphere against the Turkish population in the country. The Valley of the Wolves – Iraq has also been screened in Austria, where it became the eleventh most watched movie.