The film begins with a depiction of the events of the Munich Massacre in 1972. After the killings, the Israeli government devises "an eye for an eye" retaliation. A target list of eleven names are drawn up in retaliation for the eleven Israeli men murdered.Under orders from Israel's Prime Minister, Golda Meir (Lynn Cohen), Operation "Wrath of God" is given the green light.
Avner (Eric Bana), an Israeli-born Mossad agent of German descent, is hand-picked by Meir to lead the assassination squad because he is not well-known in the field and he knows his way around Europe. Avner had also done some brief protection work for Meir and she had known his father. To give the Israeli government plausible deniability, Avner officially resigns from Mossad, and the squad operates with no official ties to Mossad or the Government of Israel. Avner is given a team of four men: Steve (Daniel Craig), a South African driver; Hans (Hanns Zischler), a document forger from Frankfurt; Robert (Mathieu Kassovitz), a Belgian toy-maker trained in explosives; and Carl (Ciarán Hinds), a former Israeli soldier who "cleans up" after the assassinations. Since the Mossad is "not connected" to the mission, Avner and his team set about tracking down the eleven targets with the help of a French informant, Louis, who is introduced to Avner by an old friend. Funding for the mission comes in the form of U.S. cash deposited in a Swiss bank in several safety deposit boxes in Zurich that Avner alone has access to.
The group go to Rome to track down and kill their first target, one of the Black September planners, Abdel Wael Zwaiter (Makram Khoury), who is now broke and living as a poet in Italy where he has translated One Thousand and One Nights into Italian. The group follows him from a speech he gave to a small audience. After confirming the poet is indeed Abdel Wael Zwaiter (by asking him) two members of the nervous squad (Avner & Robert) make their first kill, shooting him to death in the lobby of his apartment building. Moments after Zwaiter is dead, Carl walks in and collects the spent bullet casings.
Robert pretends to be a journalist interviewing their second target, Mahmoud Hamshari (Igal Naor) (who lives in Paris), about the Munich attack. He plants a bomb in the phone that is set to be detonated by a remote key. The phone number of Hamshari is to be dialed by Carl from a public telephone booth. However, Hamshari's daughter, who is supposed to have left for the day, unexpectedly returns to the flat. The men are not able to see her go back into the building because of a truck that blocks their view. When Carl calls the telephone from a phone booth and hears the little girl's voice, he and Avner race back to the car to stop Robert from detonating the bomb. After the little girl leaves the building, Carl calls the number, asks the man who answers if he's Mahmoud Hamshari and upon affirmation of same, Robert detonates the bomb. Hamshari is hospitalized and later dies from his wounds.
The team travel to Cyprus to kill the next target, Hussein Al Bashir (Hussein Abd Al Chir Mostefa Djadjam), by planting a bomb under his bed in his hotel room. Avner gets a room next to Abd Al Chir in the hotel. Avner and Abd Al Chir are both on the balcony and converse for a short while. When Avner has seen him actually on the bed, he shuts off his night-stand lamp (the agreed signal of the group) and Robert detonates the bomb. However, the explosives are much more powerful than expected, almost killing Avner in the room next door, and injuring a young couple in the room on the other side of Al Chir's. The team now have their doubts about Louis, who provided the explosives. Louis later claims that the explosives were exactly what Robert requested.
Louis gives the group information on three Palestinians in Beirut, a calculated risk since Avner & his team were strictly ordered by their handler, Ephraim (Geoffrey Rush), not to engage any targets in Arab countries. The three men targeted are among the top most brass of PLO; Muhammad Youssef al-Najjar (Abu Youssef), (involved in planning of Black September), Kamal Adwan, a Fatah veteran, and Kamal Nasser, PLO spokesman. Ephraim at first refuses, however, he relents on the condition that the group be accompanied by Israel Defense Forces (IDF) commandos. In Beirut, Steve, Robert and Avner meet up with a group of Sayeret Matkal IDF soldiers (including future Israeli Prime Minister Ehud Barak). They penetrate the Palestinian leaders' guarded compound, killing all three leaders as well with other militia. Avner stops one of the team from killing a young teenaged witness.
Avner travels to Paris and meets again with Louis, who seems angry about the operation carried out in Beirut. Louis says that his father wishes to meet with Avner. Avner agrees and, wearing a sleeping mask, is taken to the French countryside. Louis' father is quite genial; he an Avner share a love for cooking. Avner eats with the family, a tense meal since Louis is agitated by Avner's presence & his papa's favorable attitude toward the stranger. As he leaves, Papa tells him that their business arrangement will continue as is provided Avner and his team do not attempt any other assassinations like those in Beirut. Upon returning to Paris, Louis tells Avner that he has another name for him, Zaid Muchassi (Djemel Barek). Avner agrees to the new fee of $200,000 & asks Louis to arrange a safe house for the team in Athens.
The team heads to Athens where Louis has provided a dingy apartment. During the night, four PLO members, who have rented the same apartment as a safe house, enter the dwelling. After a tense confrontation with guns drawn, Robert defuses the situation by claiming that his squad are fellow militant revolutionaries, members of ETA, RAF and ANC.
Avner discusses Middle Eastern politics with the group's leader, Ali. Ali speaks passionately about his quest for a homeland, while Avner debates with him, arguing that violence would only make the world regard Arabs as brutes, and that there are other Arab countries the Palestinians could go to. Ali disagrees, citing the examples of the Irish and the Jews themselves, and concludes that a home is more important than anything else.
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