The Saragossa Manuscript (1965)

In the Napoleonic wars, an officer finds an old book that relates his grandfather's story, Alfons van Worden, captain in the Walloon guard. A man of honor and courage, he seeks the shortest route through the Sierra Morena. At an inn, the Venta Quemada, he sups with two Islamic princesses. They call him their cousin and seduce him; he wakes beside corpses under a gallows. He meets a hermit priest and a goatherd; each tells his story; he wakes again by the gallows. He's rescued from the Inquisition, meets a cabalist and hears more stories within stories, usually of love. He returns to Venta Quemada, the women await with astonishing news.

Source: TMDb