By Jane Barrett

MADRID, Jan 15 (Reuters) - A U.N.-backed body working to raise awareness between cultures said on Tuesday it was setting up a $100 million project to make films to promote harmony between the West and Islamic countries.

The Alliance of Civilisations was founded by Spain and Turkey a year after the Islamist train bombings in Madrid to foster dialogue between cultures and religions but has been criticised for being nothing more than a talk shop.

At its first meeting since it was created in 2005, the Alliance said it was moving from words to action with a fund to produce and distribute films that promote cross-cultural understanding and respect.

Queen Noor of Jordan said the fund had already raised $10 million and would be backed by British businessman Richard Branson, video-sharing web site YouTube and the company that produced Al Gore's "An Inconvenient Truth" among others.

"They say 'perception is reality' and that 'seeing is believing'. So let us find a way to show the world something that will change their perceptions and ultimately their actions," Queen Noor said.

DOUBTS EXPRESSED

But some delegates at the Alliance, which has more than 80 members and works under the auspices of the United Nations, expressed doubts about just how much of an effect the group could have by focusing on culture.

"Conflict is historically always about water, land, natural resources and poverty," said EU foreign policy chief Javier Solana. "We can't resolve conflicts by cultural debate and dialogue," the Spaniard said.

Others argued that a change in U.S. foreign policy and an improved prospect of success for Turkey's bid to join the European Union would do more to promote harmony between Islam and the West than well-meaning movies.

"The U.N. has a peace and security pillar, an economic development pillar and a human rights pillar but it has also long needed a cultural, dialogue and tolerance pillar and we can provide that," Spanish Foreign Minister Miguel Angel Moratinos said. (Reporting by Jane Barrett)