When I arrived I expected a city bereft of just about everything–power, transportation, people. Instead I found downtown streets clogged daylong with lines of buses and cars, some of them seized from Kuwait. Gasoline is plentiful and sold at cheap prewar prices. Electricity and water have been partially reconnected. Gaudy 10-foot-high portraits of Saddam Hussein have been touched up with fresh paint. His feared Republican Guard, who monitor occasional roadblocks, are polite and neatly attired. Security forces remain ubiquitous, but surveillance of my movements was light-handed.

Just what’s going on here? What has happened to the U.N. economic sanctions? Where is the damage from allied bombings authorities here claimed was so extensive it could take 100 years to repair? And do 5 million Baghdadis really quail at George Bush’s threats to launch renewed air attacks if Iraq tries to hide nuclear weapons? Iraq’s capital appears to be laughing in the face of danger. But first appearances can deceive. This ancient city has proved resilient in trying to overcome the ravages of high-technology warfare; it is also a place of continued hardship, loneliness and despair.

Entrepreneurs may be making a killing with bootlegged whisky, but the U.N. sanctions have made Baghdad among the world’s most isolated capitals. There are no regular air links with the outside world. There are no international telephone or telex services and virtually no internal links either. Deliveries arrive months late, if at all.

Few Iraqis leave the country because they have little foreign currency and no place to welcome them. The only visitors to Baghdad are a handful of foreign journalists and teams of U.N. experts trying to uncover Saddam’s nuclear-weapons secrets. The isolation is difficult to take indefinitely. “I feel,” one hospital doctor told me, “as if I am living at the end of the world, an outcast from the human race.”

Baghdad’s rich elite and pampered high-level government officials have escaped the worst of the hardships, but virtually every other sector of society is suffering. According to UNICEF estimates, as many as 120,000 children could die countrywide during the summer as a result of war-related disease and the lack of medicine. Food and medicine theoretically are exempt from the U.N. embargo, but doctors and officials say they cannot buy supplies because Iraq’s foreign assets are also frozen.

While the Saddam Central Teaching Hospital for Children is the best-equipped facility in Iraq, senior resident Dr. Maan Bahrani says he is short of everything from sophisticated medicines to blood-transfusion bags and needles. The air conditioning breaks down frequently and “some children have already died because of this heat,” Bahrani says. The weekly death toll at his hospital has risen from fewer than five to around 20, mostly from gastrointestinal problems and malnutrition. Doctors here say the real tragedy is that it could be avoided. “Please let the world show a little humanity and we can save these children,” says Dr. Bahrani.

Several psychiatrists noted that petty crime and prostitution are on the increase, as young women sell their bodies and boys steal for the money they need to stay alive. One doctor insisted: “The whole family structure in Iraq is beginning to unravel.” Many poorer people have begun auctioning off their jewelry and household effects at weekly markets. Carpets that would be worth thousands of dollars in the West are purchased for a handful of dinars (one dinar equals roughly $1 at the prewar exchange rate), often by wealthy Iraqis who would rather pour their wealth into goods than hoard worthless Iraqi bank notes.

Marriage has now become one of Baghdad’s few growth industries. One evening I watched a remarkable ceremony as nearly 150 newlyweds checked into a luxury hotel for brief honeymoons. They rarely smiled, staring awkwardly and stiffly ahead–not so much out of nervousness for the night ahead, it seemed, but because of a general fatigue after months of acute stress.

Curiously, many Baghdadis refuse to blame the United States for their plight. Iraqis who lost loved ones in the aerial assaults are understandably bitter. But one businessman perhaps summed up the general mood: “We know who is responsible for this and he is living in Baghdad.” A former soldier said, “God bless George Bush for one thing: before this war we were all soldiers in Iraq. Now we have a chance to be free and live normal lives.” Such criticism is part of a strange phenomenon in Baghdad: though security forces are omnipotent, ordinary people have rarely been so openly outspoken about Saddam. “Maybe the disaster of this war has made us silly and reckless,” one government civil servant said. “Some people feel they don’t have much more to lose.”

The bombing was so eerily accurate–with a few notable exceptions–that a visitor needs guidance to find the bomb sites. Iraq’s communications center is being rebuilt, as are three bridges across the Tigris River. Smart bombs devastated the heart of a massive conference center; outside it still appears untouched.

Some Iraqis were so impressed they compiled their own informal scorecard for the attackers. American airmen notched up the highest marks, being credited with most of the “cleanest” hits. British crews were runners-up. When the bombing went awry and civilians were killed, Iraqis invariably blamed Saudi and Kuwaiti pilots for these “deliberate attacks” and–for reasons even they couldn’t explain–they lumped Italian airmen in with the Arabs.

Attitudes will harden quickly if hostilities resume over the nuclear dispute. Washington’s threats frighten the people of Baghdad. “If you want to get him [Saddam] and his government, just do it,” one distraught Iraqi worker said. “But you are treating us as beasts, worse than your pets…We just want to live. Tell Bush that.”