Indonesian Embassy -- 'Act of Killing' Documentary Is Humiliating for Our Country ... IT NEEDS TO DIE

"The Act of Killing" -- the docu-film which stars a real-life Indonesian warlord reenacting some of his most gruesome killings -- is destroying the country's image, so says sources in the Indonesian embassy who tell TMZ they're all praying the film BOMBS this award season.

The movie features Anwar Congo -- who's admitted he personally killed roughly 1,000 people during the anti-communist purge in the 1960s.

In the flick, Congo walks the filmmakers through the brutal executions ... recreating several killings with the use of actors ... and ultimately has an epiphany about his actions when he watches the reenactments.

But sources at the Indonesian embassy tell TMZ ... the film does more harm than good for Indonesia, because it paints the country as a backwards, violent, lawless place.

In fact, one source in the embassy tells us the office is rooting against the film this awards season because it will keep the film in the spotlight ... and they just want it to go away.

But director Joshua Oppenheimer tells us, Indonesia's ire is just another sign of the film's success. As far as Josh is concerned, Indonesia, especially its military, is angry because the film exposes the horrors they once inflicted on thousands of people -- horrors that need to be brought to light.

Josh tells us, "Every time this film wins an award, it brings human rights to the forefront again."

The film has won several international awards, but will most definitely a favorite to take home some of the big ones later this year.