The documentary called "A Letter to David" by Israeli director Tom Shoval recalls his friendship and work with David Cunio who was abducted from his home in a Kibbutz on October 7th, 2023.
The film is a "tender and deeply personal lament" from Shoval, programming co-director Michael Stutz told reporters at a press conference ahead of the festival taking place from February 13th to 23rd.
Cunio's fate remains unknown, with hopes raised by a recent ceasefire agreement that will see Hamas return its captives and Israel release Palestinian prisoners from jails.
The Berlin awards ceremony last year saw several filmmakers criticise Israel's military campaign in Gaza, which has now killed around 47,000 people and wounded 110,000, according to the Hamas-run health ministry in Gaza.
US filmmaker Ben Russell, wearing a Palestinian scarf, accused Israel of committing "genocide" with its bombardment of the densely populated territory.
Palestinian filmmaker Basel Adra said the local population was being "massacred" by Israel, to applause from the audience.
A spokeswoman for the German government, a staunch ally of Israel, said it was "unacceptable" that the Hamas attack on Israel which triggered the war had not been mentioned at the ceremony.
Berlin's mayor Kai Wegner called the remarks "unacceptable" and said that there was "no place for anti-Semitism in Berlin".
Wegner also said that he expected new festival director Tricia Tuttle to "ensure such incidents do not happen again".
PODCAST: Germany's Berlinale backlash explained
'Open dialogue'
Tuttle said last month that the furore had put some film directors off the festival because of free speech concerns.
"Lots of filmmakers from Arab countries have approached us as well over the last weeks, just to make sure the festival is a space for open dialogue and discourse," she added on Tuesday.
"Where we can, we like to have individual conversations, and we'd encourage filmmakers to come to us to talk to us about this."
READ ALSO: Why Germany's resolution against anti-Semitism is attracting so much controversy
South Korean director Bong Joon-ho, famed for his 2019 prize-winner "Parasite", is set to present his new film "Mickey 17" out of competition in Berlin.
The festival has also announced that it will give a lifetime achievement award to British actor Tilda Swinton, who has collaborated with Bong in the past.
Tuttle unveiled the full line up of films for its main competition, which includes work from American director Richard Linklater, South Korea's Hong Sangsoo, Mexico's Michel Franco and Radu Jude from Romania.
Linklater is returning for the first time since 2014 when he won a director's silver bear, the second-highest award, for his epic "Boyhood" that was filmed over more than decade.
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