For hundreds of years the line between fiction and nonfiction has been clear in the West. Everyone accepted the terms and played by the rules (this is fiction and that is not fiction, this is true and that is not true). But during the second half of the 20th century this line has been slowly disintegrating, in the same ways that the line between high and low culture has disintegrated. These days films like Nicholas Barker's Unmade Beds don't even sweat over the distinction between documentary and drama; indeed, such films show that the West is arriving at the conclusion that there has never been anything but fiction, and that line we have imposed over all of these centuries will soon be extinct.
The Iranians, however, are way ahead of us in this regard; something in their system of thinking seems to have informed them of the insubstantiality of this true/false (or true/faux, as Derrida once cleverly punned) line immediately. In their recent films, and especially in the films of Abbas Kiarostami, it is natural to disregard the line entirely; and it's understood that whenever one makes a film or writes a book or takes a photo, they are automatically in the process of creating a work of fiction.
It was Susan Sontag's essay "On Style" (written in 1965) that showed us that "naturalism" or "realism" is "a style," and that when critics distinguish what is style (art) from what is transparent (documentary, natural), what is really at issue is "a style," or a way of making art. This is the way one should look at Kiarostami's 1987 film Where is the Friend's Home? It's a simple story -- a boy looks for his friend, so as to hand him a homework notebook -- made with no professional actors. The film is photographed without fancy or deliberate camera positions or lenses, and its plot progresses as if there was no script, as if the director had no idea what he was going to make until the camera started rolling. But this is "a style" of making a film, which is no further or closer to the "truth" than, say, a film like Andrei Tarkovsky's The Sacrifice, in which the actors' movements are so specific, so contrived that they are almost balletic.
A few years after he made Where is the Friend's Home? an earthquake destroyed the village where the film was set, and Abbas Kiarostami decided to make a film about revisiting this area to find the boy and other actors from his film. As if it were the most natural thing in the world, he uses an actor to play himself, searching for his actors. The director drives about the hills and valleys of the devastated region, encountering numerous local people who, as they are piecing their shattered lives back together, assist him in his quest.
To complicate matters further, the making of And Life Goes On... is the basis of Kiarostami's next film, Through the Olive Trees. This movie concerns two young actors who play a married couple in And Life Goes On..., and how in "real life" the fictional husband (who is poor, uneducated, and a dreamer) is trying to win the real heart of his fictional wife (who is middle-class, educated, and arrogant). After filming a scene from the movie, he follows her about the village, pleading that if she marries him he will be a great husband. She doesn't believe him for a second, and flatly refuses the offer.
This lack of a border (or borders) between fiction and nonfiction is all the more impressive if one watches these films in the proper order, because at the end of the experience you realize that it's not so much a question of what is art and what is not art; everything produced by humans is art, and the real matter at hand is, as Susan Sontag pointed out, its mode, its manner, its "style."