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In the hour before sunset, the main street of Dubrovnik, the stradun, once again is thronged with people enjoying their traditional stroll.

They laugh, talk, greet friends and fellow survivors. The young men-some in Croatian army uniform, others in jeans and anoraks-smile at the women and ignore the asphalt patches that cover the shell holes in the polished stone pavement.

The people of Dubrovnik, who survived months besieged by the guns of the Serb-led Yugoslav army, are beginning to enjoy life again. The imminent threat of attack has ended. The snipers, who once had a direct line of fire on the stradun from the nearby hills, are gone.

But things are far from normal in this historic walled city. Before the war, Dubrovnik made its living as a picturesque Adriatic Sea resort catering mostly to Western Europeans and Americans who arrived aboard cruise liners. Not surprisingly, the tourists who were Dubrovnik’s economic lifeblood have not returned.

“We are not at war, but we are not at peace,” said Marko Breskovic, owner of the Troubadour Cafe and member of the Dubrovnik Troubadours, a quartet that made the songs of Dubrovnik known around the world.

He speaks with pride of the perseverance of Dubrovnik’s people, who rejected a Yugoslav army ultimatum to surrender and then withstood the worst military assault in the city’s 1,300-year history.

“They wanted to make us afraid, to make us leave,” Breskovic said. “But we wouldn’t give up.”

Nevertheless, the war and its hardships-devastation, injury, death-touched everyone. Since Dubrovnik first came under siege 16 months ago, the old city and its surrounding area, with a population of about 70,000, suffered an estimated $2 billion in property damage. About 200 people were killed, and several hundred others injured. And the local economy has lost $500 million in tourist revenue.

Quiet but uneasy

Under a cease fire negotiated by the United Nations, the Yugoslav army withdrew in October, leaving behind destruction and a precarious calm that cannot be called peace as long as guns still blaze in nearby regions of Croatia.

“We need peace for Dubrovnik. Everything here is tourism,” said Breskovic, who kept his cafe open during the fighting but who now must close early to keep to an evening curfew intended to save electricity.

Dubravko Milosevic, head of promotion for the Dubrovnik Tourist Board, said at least 70 percent of all residents were directly or indirectly dependent on tourism. Most are now in desperate straits, and there is little hope for change soon.

“We haven’t any promotional material,” Milosevic said. “It was all destroyed. Some of the hotels, particularly the best hotels, also were destroyed.”

But what wasn’t destroyed-contrary to many perceptions-was the old city itself.

“The market thinks that Dubrovnik doesn’t exist now, that it was destroyed. It isn’t true,” Milosevic said.

Igor Fiskovic, art historian in charge of restoration of the city, said what happened in Dubrovnik was really “a question of offended dignity” rather than outright destruction.

Dubrovnik was directly attacked three times. The most serious assault took place Dec. 6, 1991, when for 12 hours more than 2,000 artillery shells rained down from the surrounding hills and from gunboats.

The stradun alone took 43 direct hits, and shells smashed the polished limestone. More than 63 percent of the old city’s buildings were shelled, leaving nine gutted, and several monuments were damaged-including the Franciscan Monastery, the Onofrio Fountain, St. Blaise Church and the famous clock tower. The Franciscan Monastery, erected in 1317, was struck more than 50 times.

Despite the intensity of the onslaught, much of the damage was superficial, and Fiskovic estimated that external repairs to the public property would cost about $13 million.

That’s not a huge sum, but, as Fiskovic notes, Dubrovnik is only one among hundreds of ravaged towns in nearly bankrupt Croatia. The United Nations Educational, Scientific and Cultural Organization, which has put the city on its list of world cultural treasures, has developed a plan for reconstruction, but so far not a penny of assistance has arrived.

Close to the front

While the Yugoslav army has withdrawn, the new front is only 10 miles away. With Serbian forces still controlling more than one-third of Croatia, and with the Croatian military chafing to reclaim that land, no permanent peace is in sight.

Milosevic hopes that as many as 70,000 tourists, about 10 percent of the number the city welcomed before the war, will return this summer. He estimates that 50 hotels will be in shape to receive them. He also is planning to promote Dubrovnik’s famous two-month music festival.

And tourists will face another imponderable-the possibility of renewed warfare. As Milosevic conceded, “We can’t guarantee their safety at this moment.”